The German bunds rallied on Thursday as Federal Reserve Federal Open Market Committee and Bank of Japan voted to keep the rates unchanged. Also, weak employment change drove investors towards safe-haven assets. The yield on the benchmark 10-year bonds, which moves inversely to its price, moved down 11.45 pct to 0.429 pct and the yield on the 2-year bonds fell 2.75 pct to -0.455 pct by 0845 GMT.
Moreover, the United States Federal Reserve left policy rate unchanged in a 0.25-0.50% range, in line with market expectations. One key highlight of the statement was the removal of the note that inflation has picked up in recent months, something that was seen as a budding concern in the wake of the March statement. However, the statement noted that the Committee continues to closely monitor inflation indicators and global economic and financial developments. Similarly, the Bank of Japan in its policy meeting left the monetary policy rate unchanged at -0.1 pct, against the market expectation of ease. I also kept its asset purchase program at ¥80 trillion per annum and ¥300 billion into ETFs.
The German April unemployment change plunge by 16K, against no change was expected, from revised 3K decline in March. Meanwhile, the unemployment rate stood at 6.2 pct (frozen from 4-month).
The markets in the Germany will now focus on Consumer Price Index (CPI) at 1200 GMT and retail sales (0600 GMT) on Friday. Meanwhile, the German stock index DAX Index fell 1.42 pct at 10,155 by 0845 GMT.
