German bunds slump ahead of 30-year auction

The 10-year German government bunds slumped Wednesday, ahead of the super long 30-year bund auction, scheduled to be held later in the day. Also, markets are awaiting the German Bundesbank President Weidmann’s speech late today. Also, investors have shifted their interests toward from riskier assets, like equities.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 3 basis points to 0.44 percent, the long-term 30-year bond yields also jumped nearly 5 basis points to 1.21 percent and the yield on short-term 2-year bond traded 1/2 basis point higher at -0.66 percent by 08:40 GMT.

At 54.7, the Markit Flash Germany Composite Output Index still pointed to robust growth in January that was faster than the 2016 average (54.3). However, the latest reading was down from 55.2 in December and the lowest in four months.

Further, the Martkit Eurozone PMI registered 54.3 in January according to the preliminary flash estimates. Although down marginally from 54.4 in December, the latest reading was the second highest since December 2015 and one of the highest readings seen over the past five-and-a-half years.

Lastly, markets will now wait for today’s scheduled speech of the German Bundesbank President Weidmann’s speech.

Meanwhile, the German stock index DAX Index traded 1.11 percent higher at 11,724.50 by 08:40 GMT, while at 8:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 53.27 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex