Eurozone periphery bonds jump post fall in April retail sales; German 10-year equivalent at 6-week high

The Eurozone periphery bonds jumped Tuesday, after reading weaker-than-expected retail sales for the month of April and ahead of the zone’s first-quarter gross domestic product (GDP), scheduled to be released on June 7. Further, German 10-year equivalents hit a 6-week high today as investors poured into safe-haven instruments ahead of the European Central Bank’s (ECB) monetary policy decision, scheduled to be held on June 8.

The German 10-year bond yields, which moves inversely to its price, slumped nearly 2 basis points to 0.28 percent, the French 10-year bond yields, plunged 3 basis points to 0.69 percent, Irish 10-year bonds yield fell nearly 2-1/2 basis points to 0.76 percent, Italian equivalent lower 3-1/2 basis points to 2.24 percent, Netherlands 10-year bonds yield ticked 2 basis points lower to 0.48 percent, Portuguese equivalents also slipped 2 basis points to 3.04 percent while the Spanish 10-year yields traded nearly 4 basis points down at 1.54 percent by 09:20 GMT.

Eurozone retail sales increased slightly in April, marking the fourth consecutive monthly rise, as shoppers stepped up their purchases of food and drinks for Easter holidays, estimates released on Tuesday show.

Retail sales in the 19 countries sharing the euro increased by 0.1 percent in April from March, the European Union's statistics office Eurostat said, slightly below the average market expectation of a 0.2 percent rise. Year-on-year, the volume of retail sales grew 2.5 percent, higher than the 2.3 percent rise forecast by economists polled by Reuters.

However, the monthly rise in April was offset by a downward revision of March data to a 0.2 percent rise from a previously estimated 0.3 percent increase. The year-on-year growth of sales for March was revised up to 2.5 percent from the 2.3 percent estimated earlier by Eurostat.

German retail sales continued to rise sharply in May, according to the latest PMI survey data. At 55.0 in May, down from 56.2 in April, the seasonally adjusted headline Germany Retail PMI signalled a sixth successive month-on-month expansion in sales mid-way through the second quarter. The rate of expansion eased from April’s 21-month record but remained sharp overall.

Meanwhile, the pan-European STOXX 600 index was down 0.42 percent at 390.39, German DAX slipped 0.42 percent to 12,769.50, France’s CAC40 fell 0.26 percent to 5,295.30, while the PSI20 Index rose 0.35 percent to 5,296.65 by 09:30 GMT, while at 09:00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at -32.05 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex