German bunds climb after ECB President Draghi maintains pessimism over global political chaos in Oct policy meeting

The German bunds climbed during European session Friday European Central Bank (ECB) President Mario Draghi maintained pessimism over the ongoing global political chaos in its monetary policy meeting, held yesterday. Markets will also be awaiting the governor’s speech, scheduled for today as well, by 14:00GMT for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, jumped 3-1/2 basis points to 0.361 percent, the yield on the 30-year note climbed 2-1/2 basis points to 1.005 percent and the yield on short-term 2-year surged nearly 2 basis points to -0.667 percent by 09:30GMT.

Yesterday the ECB unsurprisingly left unchanged its monetary policy, including its plan to end net asset purchases at the end of the year and its expectation that its key rates will remain at their present levels at least through the summer of 2019.

And while Draghi acknowledged the recent run of softer-than-expected euro area economic data, which was highlighted earlier this week by the sharp drop in the October flash PMIs, he remained cautiously optimistic, taking heart from ongoing improvements in the labour market. He also judged that the evidence was still consistent with broad-based expansion and gradually rising inflationary pressures, and still assessed the risks to the economic outlook to be balanced, Daiwa Capital Markets reported.

"We, however, are certainly not convinced and expect the ECB to have to revise down its growth and inflation forecasts in December," the report added.

Meanwhile, the German DAX slumped nearly 2 percent to 11,096.97 by 09:45GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -29.97 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex