German bunds jump ahead of ECB’s account of October policy meeting, Q3 GDP

The German bunds jumped during European session Wednesday amid silent trading hours that barely witnessed any data of major economic significance. But, attention remain glued to the European Central Bank’s (ECB) account of monetary policy meeting for the month of October, scheduled to be released on November 21 by 12:30GMT.

Besides, the country’s gross domestic product (GDP) for the third quarter of this year and November month manufacturing PMI, both scheduled to be released on November 22 by 07:00GMT and 08:30GMT respectively shall provide further direction into the debt market.

The German 10-year bond yield, which move inversely to its price, plunged 4 basis points to -0.382 percent, the yield on 30-year note slumped nearly 5 basis points to 0.105 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points down at -0.653 percent by 10:00GMT.

A quiet day for euro area economic data saw the release this morning of German PPI figures for October, which continued to illustrate disinflationary pressures down the price pipeline. In particular, producer prices fell for the fourth month out of the past six, to leave the annual PPI rate down 0.5ppt to -0.6 percent y/y, the steepest drop for more than three years, Daiwa Capital Markets reported.

Of course, this principally reflected a further fall in energy prices, down 1.2ppts to -3.1 percent y/y, the steepest decline for three years. In contrast, consumer non-durable price inflation rose ½ppt to 2.3 percent y/y, the strongest rate for almost two years, the report added.

Nevertheless, with prices of intermediate goods still falling and capital goods little changed, the core PPI rate moderated further at the start of Q4, to just 0.3 percent y/y, indicating that underlying price pressures are effectively non-existent, Daiwa further noted in the report.

Meanwhile, the German DAX edged nearly 1 percent lower to 13,100.12 by 10:10GMT.