Eurozone periphery bonds plunge ahead of July FOMC minutes; safe-haven bunds surge

The Eurozone periphery bonds plunged Wednesday as investors remained cautious and sought refuge in the safe-haven German bunds ahead of July FOMC meeting minutes, which trigged a worldwide selloff in lower-rated debt and a flight to haven investments such as German bunds.

The 10-year Irish 10-year bonds yield rose nearly 2 basis points to 0.422 percent, Italian sovereign bond inched higher 1 basis point to 1.133 percent, Portuguese 10-year bonds yield bounced more than 9 basis points to 2.942 percent, Spanish 10-year bonds yield climbed 1 basis point to 0.988 percent, the benchmark German 10-year bonds yield, which moves inversely to its price, fell 1 basis point to -0.048 percent by 09:20 GMT.

The minutes from the 26 - 27 July FOMC meeting will be published on Wednesday, 17 August at 18:00 GMT. Investors will remain keen to focus on this release in an attempt to predict the central bank's likely step to hike interest rates in the upcoming monetary policy meeting, particularly in the wake of the UK’s Brexit vote.

On Tuesday, Eurozone bonds traded weaker on profit taking. But in particular Portuguese bond yields jumped over 10 basis points to 2.81 percent on the back of DBRS ratings agency comments warning that the country’s BBB credit rating was at risk from mounting pressures from the effects of slow growth, burdensome govt and corporate debt levels and banking sector problems.

Investors will also remain keen to focus on the upcoming consumer inflation data. Meanwhile, the pan-European STOXX 600 index was down 0.32 percent and the euro-area blue-chip gauge, the STOXX 50 dipped 0.85 percent. The DAX trading 0.73 percent lower and the CAC-40 fell 0.44 percent by 09:20 GMT.