German bunds narrowly mixed in subdued trade; markets to resume from 2nd week of January

The German bunds traded narrowly mixed Friday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance. Also, some profit taking has been observed along the long-range of the curve.

We foresee that the bund prices will keep drifting between small gains and losses in quiet trading due to a long global Christmas and New Year holidays.

The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 0.18 percent mark, the long-term 30-year bond yield climbed 2 basis points to 0.89 percent and the yield on short-term 2-year bond slid 1 basis point to -0.79 percent by 08:20 GMT.

Last week, Rimsevics, Latvia's central bank governor, blamed a lack of progress on economic reform and on the European Commission's stimulus package for curbing confidence and lending despite the ECB's massive injection of cash since 2015, Reuters reported.

The ECB has extended its bond-buying scheme until the end of 2017 saying it was yet to be convinced that inflation was heading to its target of almost 2 percent, they added.

The Federal Reserve Chair Janet Yellen commented that the United States is now seeing its strongest labour market in nearly a decade as job creation has continued at a relatively steady pace. Also added that she has seen signs of wage growth improving and that weekly earnings for younger workers are making strong gains.

Meanwhile, the German stock index DAX Index traded 0.24 percent lower at 11,423 by 08:20 GMT. While at 08:00 GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bullish at +90.09 (higher than +75 represent a bullish trend).