German bunds slide ahead of ECB’s monetary policy decision

The German government bunds slid Wednesday as investors remain keen to watch the European Central Bank’s (ECB) monetary policy decision scheduled to be held on March 9.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 3-1/2 basis points to 0.35 percent, the long-term 30-year bond yields rose nearly 3 basis points to 1.18 percent and the yield on short-term 3-year bond traded nearly 1 basis point higher at -0.75 percent by 08:00 GMT.

The ECB is expected to maintain its dovish stance at the meeting this week although inflation has reached the 2 percent target. The ECB has said it will not change its monetary policy based on such a rise in inflation and in the introductory statement from the latest ECB meeting it was communicated that 'the Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability'.

Lastly, investors will be closely eyeing the trade balance, due on March 10 for detailed direction in the debt market.

Meanwhile, the German stock index DAX Index traded 0.02 percent higher at 11,972.95 by 09:10 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 6.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex