German bunds gain modestly after reading lower-than-expected Eurozone composite PMI

The German bunds gained modestly Wednesday as investors poured into safe-haven assets after reading lower-than-expected Eurozone’s composite PMI for the month of March. Also, markets will be looking forward to a host of speeches from the members of the European Central Bank (ECB).

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1/2 basis point to 0.24 percent, the long-term 30-year bond yields also slipped 1/2 basis point to 1.03 percent and the yield on short-term 2-year bond traded 1 basis point lower at -0.79 percent by 08:20 GMT.

The final Markit Eurozone PMI Composite Output Index rose to a 71-month high of 56.4 in March, up from 56.0 in February but below the flash estimate of 56.7. The index has signalled expansion in each of the past 45 months. Also, the final Markit Eurozone PMI Services Business Activity Index rose to a 70-month high of 56.0 in March, up from 55.5 in February but below the earlier flash estimate of 56.5.

"Price pressures remain elevated, and look likely to feed through to higher consumer prices in coming months, but it seems likely that the ECB will hold its accommodative policy stance until at least later this year. These survey numbers nevertheless shorten the odds of policy being tapered in early-2018," said Chris Williamson, Chief Business Economist, IHS Markit.

Meanwhile, the German stock index DAX Index traded 0.31 percent lower at 12,242.75 by 08:50 GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 0.90 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex