German bunds rebound ahead of 30-year auction, ECB President Draghi’s speech

The German government bunds rebounded Monday ahead of the 30-year auction, scheduled to be held on February 8 amid a timid trading session that lacked release of significant economic data. Also, markets are awaiting the European Central Bank (ECB) President Mario Draghi’s speech scheduled for later in the day.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell over 1 basis point to 0.40 percent, the long-term 30-year bond yields remained flat at 1.17 percent and the yield on short-term 2-year bond slipped 1/2 basis point to -0.74 percent by 08:40 GMT.

The German bunds have been closely following developments in the U.S. debt market. The U.S. benchmark 10-year bond yields slumped over 3 basis points to 2.45 percent, from Friday’s low of 2.42 percent.

In addition, German Finance Minister Wolfgang Schäuble has added to the transatlantic debate over the appropriate value for the euro's exchange rate, blaming the European Central Bank (ECB) for keeping it too low for his country.

Further, German retail sales dropped unexpectedly in December, down 0.9 percent from November, a possible sign that the deadly terror attack at a busy Berlin Christmas market kept many shoppers away from the shopping centres. Lastly, investors will be eyeing the release of December trade balance data, due on February 9.

Meanwhile, the German stock index DAX Index traded 0.61 percent lower at 11,582.50 by 08:50 GMT, while at 8:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -73.56 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex