German Bunds Climb on Soft Economic Growth
The German bunds surged further on Tuesday after reading weaker than expected first quarter Gross Domestic Product (GDP) figure. Also, investors shifted to safe-haven buying amid losses in riskier assets including crude oil and stocks. The yield on the benchmark 10-year bunds, which moves inversely to its price fell 2bps to 0.167 pct by 0630 GMT.
The Germany Q1 GDP remained steady at 0.7 percent, trending in the line of market consensus of 0.7 percent. On annual basis, it declined 1.3 percent; lower than the market expectations of 1.6 percent, unchanged from previous 1.3 percent in the last quarter of 2015.
Moreover, the German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Crude oil prices fell on firm global supply, a stronger dollar and surging output from Iran to Europe and Asia. Yesterday, Iranian deputy oil minister quoted that Iran plans to increase oil export capacity to 2.2 million barrels by the summer and has no plans to freeze its level of oil production and export. The International benchmark Brent futures fell 0.85 percent to $47.94 and West Texas Intermediate (WTI) dipped 0.52 percent to $47.83 by 0630 GMT.
Meanwhile, the German stock index DAX Index dipped 0.74 pct at 9,842.29 by 0630 GMT on absorbing weak cues emerging from crude oil futures.