The rise in inequality is attributed to the shrinking wages of low-income households, and a cut down in temporary positions
German bunds gain following lower-than-expected April Ifo business climate index
The German bunds gained during European trading session Wednesday after the country’s Ifo business climate index for the month of April missed market expectations, also coming in lower than the previous reading in March.
The German 10-year bond yields, which move inversely to its price, fell 2 basis points to 0.021 percent, the yield on 30-year note slumped 2-1/2 basis points to 0.669 percent while the yield on short-term 2-year traded nearly flat at -0.587 percent by 09:15GMT.
Following yesterday’s disappointing European Commission consumer sentiment release – with the headline index unexpectedly declining for the first month in four and by 0.7pt to -7.9 to match the level at the start of the year – the flow of sentiment surveys has turned to the corporate sector today, with the German Ifo and French INSEE business sentiment surveys for April.
The mood among German managers became slightly gloomier this month. The ifo Business Climate Index fell from 99.7 points (seasonally adjusted) in March to 99.2 points in April. Companies are less satisfied with their current business situation. March’s gentle optimism regarding the coming months has evaporated. The German economy continues to lose steam.
While today’s survey suggested that conditions remained more favourable than average in the main sectors, the survey’s turning-point indicator took a notable turn for the worse in April suggesting a downside skew to the risks to the economic outlook over the near term, Daiwa Capital Markets reported.
Meanwhile, the German DAX remained 0.41 percent higher at 12,283.99 by 09:20GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -23.61 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex