German bonds slump after Eurozone Q2 GDP cheers markets; eyes on ECB policy decision

The German government bonds slumped Thursday after investors have shrugged-off the decline in the country’s industrial production for the month of July, besides, the European Central Bank’s (ECB) monetary policy decision, due by 11:45GMT, which will add further direction to the debt market.

The German 10-year bond yields, which moves inversely to its price, jumped nearly 2 basis points to 0.35 percent, the yield on the 30-year note climbed 1-1/2 basis points to 1.12 percent and the yield on short-term 2-year traded 1 basis point higher at -0.72 percent by 08:45GMT.

Following yesterday’s weaker-than-expected German factory orders data, this morning’s industrial production figures from the largest euro area member state were also softer than anticipated. Having fallen by 1.1 percent m/m in June, production was unchanged in July. However, the weakness that month was concentrated mainly in the energy sector, while manufacturers saw output grow by 0.3 percent m/m and construction sector activity rose by 0.5 percent m/m after two consecutive months of declines.

Meanwhile, the German DAX traded 0.88 percent higher at 12,320.50 by 09:10 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -16.91 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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