German bunds gain following weak crude oil prices

The German bunds gained Tuesday as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 2-1/2 basis points to -0.131 percent, the yield on long-term 30-year note dipped 2-1/2 basis points to 0.431 percent and the yield on short-term 2-year bond slid 2 basis points to -0.697 percent by 08:40 GMT.

The German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Crude oil prices fell as investors cashed in profits after relishing previous three percent jump in prices. The International benchmark Brent futures fell 0.23 percent to $47.82 and West Texas Intermediate (WTI) dipped 0.09 percent to $45.89 by 04:40 GMT.

On Monday, Germany's IFO Business Climate index jumped unexpectedly to 109.5, fully 3.3 percentage points above the previous month's level of 106.2, against consensus expectations of a marginal improvement to 106.3, and representing a 2-year high. Both the Current Assessment and Expectations indices rose by 1.8 and 4.4 points respectively.

Lastly, investors remained keen to focus on the series of upcoming economic data, highlighted by the unemployment rate, consumer inflation and retail sales.

Meanwhile, the German stock index DAX Index traded 0.45 percent lower at 10,349.50 by 08:40 GMT.