The German bunds jumped on the last trading day of the week after the European Central Bank (ECB) decided to continue its debt-buying operation even beyond September 2018, if required. Also, investors are closely eyeing the eurozone’s consumer price-led inflation index (CPI) for the month of November, scheduled to be released on December 16 by 10:00GMT.
The German 10-year bond yields, which move inversely to its price, plunged nearly 2 basis points to 0.29 percent, the yield on 30-year note slumped nearly 3 basis points to 1.10 percent and the yield on short-term 2-year traded flat at -0.73 percent by 08:40GMT.
After yesterday’s announcements from the Governing Council, which saw the ECB significantly revise up its GDP growth outlook but leave its inflation forecasts little changed, allowing Draghi to strike a dovish tone, it should be a relatively uneventful end to the week for euro-area economic news with the October trade report the most notable among the data releases. Given the narrowing of the German trade surplus that month, we also anticipate a modest decline in the euro area headline balance, from EUR25 billion in September.
Regarding non-standard monetary policy measures, the Governing Council confirmed that from January 2018 it intends to continue to make net asset purchases under the asset purchase programme (APP), at a monthly pace of EUR30 billion, until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.
Meanwhile, the German DAX traded 0.20 percent down at 13,041.50 by 08:45 GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -51.33 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex
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