German bonds trend lower ahead of 10-year auction, August CPI inflation

The German government bonds trended lower Tuesday as investors wait to watch the country’s 10-year auction, scheduled to be held on September 13 by 09:35GMT. Also, the consumer price inflation index, due on the same day by 06:00GMT will provide detailed direction into the debt market.

The German 10-year bond yields, which moves inversely to its price, jumped 3 basis points to 0.36 percent, the yield on the 30-year note climbed 2-1/2 basis points to 1.15 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.74 percent by 09:55GMT.

A relatively quiet day in the euro area got under way with French payroll data for Q2, which confirmed another quarter of steady jobs growth in the euro area's second-largest member state. In particular, net payrolls rose for the eleventh consecutive quarter and by 81.4k (0.3 percent q/q), led by a gain of 76.8k in private sector jobs. That took the increase in payrolls over the year to more than 303k, representing an increase in employment of 1.2 percent y/y.

All French surveys, including today’s Manpower report, point to a further quarter of steady jobs growth in Q3, supported by the solid economic expansion (yesterday’s Bank of France business survey suggested another quarter of GDP growth circa 0.5 percent q/q in Q3) and, arguably, business optimism with respect to Macron’s economic reform agenda.

Meanwhile, the German DAX traded 0.53 percent higher at 12,540.25 by 09:55 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -56.06 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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