German bunds plunge ahead of 5-year auction; ECB President Draghi’s speech in focus

The German government bunds plunged Wednesday ahead of the 5-year auction scheduled to be held later in the day. Also, investors are eyeing the European Central Bank President Mario Draghi’s speech scheduled for Thursday.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 3 basis points to 0.46 percent, the long-term 30-year bond yields also surged 3 basis points to 1.18 percent and the yield on short-term 2-year bond rose nearly 1/2 basis point at -0.68 percent by 08:10 GMT.

Germany's Federal Statistics Office said the unemployment rate dipped to a seasonally adjusted 5.9 percent this month from 6.0 percent in December. Analysts expected the jobless rate to hold steady in January. Further, the number of unemployed people declined by a seasonally adjusted 26,000 from a month earlier, compared to forecasts for a drop of 5,000. Jobless claims fell by 20,000 in December.

Also, investors shall remain hooked to the European Central Bank (ECB) President Mario Draghi’s speech, scheduled for later Thursday for further direction in the bond market.

Meanwhile, the German stock index DAX Index traded 0.91 percent higher at 11,638.75 by 08:20 GMT, while at 8:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 114.71 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex