The German bunds gained Wednesday as investors covered short positions, booked after the Federal Reserve raised interest rates for the first time this year and signalled at a faster hike in borrowing costs next year.
Also, 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, fell 2 basis points to 0.18 percent, the long-term 30-year bond yield also dipped 2 basis points to 0.88 percent and the yield on short-term 2-year bond slid 1 basis point to -0.83 percent by 08:40 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.
Moreover, 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 flat at 11,470 by 08:40 GMT. While at 08:00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at +52.60 (higher than +75 represent a bullish trend).
