German bunds jump ahead of August consumer price inflation, ECB members’ speeches

The German bunds jumped during European trading session Monday ahead of the country’s consumer price inflation (CPI) for the month of August, scheduled to be released on September 18 by 14:30GMT and a host of speeches by members of the European Central Bank (ECB), due through this week, which shall provide further direction in the debt market. 

The German 10-year bond yield, which move inversely to its price, suffered 2 basis points to -0.475 percent, the yield on 30-year note plunged 4-1/2 basis points to 0.045 percent and the yield on short-term 2-year slipped 1 basis point to -0.716 percent by 10:00GMT.

After last week’s excitement at the ECB, this week will bring the first of the new TLTRO-III operations, where banks will benefit from more generous conditions than previously thought (an interest rate as low as the deposit rate if they increase lending sufficiently, and a maturity of up to three years), Daiwa Capital Markets reported.

The coming week should be relatively quiet for euro area economic data, with the Commission’s flash September consumer confidence index on Friday arguably the data highlight. The headline indicator has effectively trended sideways over the past six months. And while it fell a larger-than-expected 0.5pt in August to -7.1, that left it still broadly in line with the average since the start of the year, the report added.

Meanwhile, the German DAX slipped -0.65 percent to trade at 12,387.63 by 10:05GMT.