German Bunds Flat on Mixed Economic Data

German Bunds Flat on Mixed Economic Data

10 May 2016, 12:19
Roberto Jacobs

German Bunds Flat on Mixed Economic Data

The German bunds were trading nearly flat on Tuesday as mixed economic data did nothing to assuage concerns about economic growth, keeping 10-year sovereign bonds well below 0.15 pct marks for the first time in three weeks. The yield on the benchmark 10-year bonds, which moves inversely to its price stood unchanged at 0.132 pct and the yield on the 2-year bonds also remained steady at -0.510 pct by 0920 GMT.

The German industrial production tumbled 1.3 pct m/m in March, against markets expectation of 0.2 pct fall, from down 0.7 pct (previous revised down from 0.5 pct). On the contrary, economic ministry said that Q1 overall industry output rises 1.8 pct due to strong hikes in construction and capital goods. He further added that industry has overcome weak phase of H2 2015 and economic trend in the sector pointing upward.

On the other hand, Germany trade surplus widened to EUR 26 billion, against market consensus of EUR 20.6 billion, from EUR 20.2 billion (previous revised down from EUR 20.3 billion). In addition, exports rose 1.9 pct m/m, estimates were for zero growth, from prior 1.35 pct and imports fell 2.3 pct m/m , consensus was for 0.3 fall, from up 0.1% (previous revised down from +0.4 pct).

Yesterday, the German Germany factory orders jumped 1.9 pct m/m, higher than the market expectation of 0.6 pct, from down 0.8 pct, previous revised up from -1.2pct. Moreover, the economics ministry said that overall industrial orders had a solid start to the year. Despite the overcast foreign trade environment, German industry was able to post a noticeable increase in orders from above.

The markets will now focus on the April CPI and Q1 GDP on Friday (0600 GMT). Meanwhile, the German stock index DAX Index rose 1.06 pct at 10,086, on rallying crude prices by 0915 GMT.

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