German bunds sag as bullish sentiment intensifies amongst investors

The German bunds slumped Thursday as investors moved away from the safe-haven buying amid gains in riskier assets including equities and crude oil. Also, investors risk appetite increased after recent data showed that the Eurozone business and consumer confidence rebounded in September.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose more than 3 basis points to -0.114 percent, the yield on long-term 30-year note jumped 3-1/2 basis points to 0.451 percent and the yield on short-term 2-year bond climbed 1 basis point to -0.686 percent by 09:20 GMT.

Eurozone economic confidence for September jumped to 104.9, vs consensus expectations that it would stay at 103.5. This is the highest since January. The forward-looking Business Climate Indicator also rose to 0.45 (an 11-month high) from 0.03, vs expectations of 0.05. This follows the bullish German IFO index and confirms that Brexit is not inhibiting an improving growth outlook. This is yields-positive, although not much market reaction is being seen.

Moreover, the European Central bank governing council member Erkki Liikanen said that the euro area economy is to grow at a moderate pace, but risks are tilted to the downside. All policymakers must help to boost growth and inflation.

In addition, after Wednesday's informal OPEC meeting in Algeria resulted in a preliminary agreement, unexpectedly, to cut production (to 32.5-33m bpd), the front-month WTI future rose by about $2 to about $47.00, a 3-week high, which it has largely sustained so far today. Now the focus will be on the official meeting in Vienna on November 20.

Lastly, investors also remained keen to focus on the upcoming economic data, highlighted by consumer inflation and retail sales.

Meanwhile, the German stock index DAX Index traded 0.79 percent higher at 10,518.70 by 09:20 GMT.