German bunds flat in subdued trade; next week’s ECB policy decision eyed

The German bunds traded nearly flat on Friday, succumbing to thin trading activity during a relatively quiet session that saw little data of much significance. Also, investors await the European Central Bank policy decision, scheduled to take place on Thursday at 11:00 GMT.

The yield on the benchmark 10-year bond hovered around -0.02 percent mark, the yield on long-term 30-year note climbed nearly 1 basis point to 0.486 percent and the yield on short-term 2-year note climbed nearly 1 basis point to -0.645 percent by 09:20 GMT.

In terms of US data, the June Labour Department producer prices index (PPI) report revealed an overall increase of +0.5 percent m/m result, comes in above market expectations for a +0.3 percent m/m reading, as compared to the +0.4 percent m/m increase that occurred in May.

Similarly, the US Initial jobless claims for the week ending 9 July held unchanged at 254k, well below expectations for a 265k result, from the unrevised 254k reading seen in the week prior.

Moreover, the European Central bank is also expected to leave interest rates intact in its monetary policy meeting scheduled to be held on July 21 and the meeting will be dominated by Brexit. Also, the European Central Bank will not ease monetary policy any further at its meeting next week, according to an overwhelming majority of respondents in a Reuters poll of euro money market traders on Monday.

Meanwhile, the German stock index DAX Index tumbled 0.57 percent at 10,010.5 by 09:20 GMT.