German bunds slump ahead of October unemployment change, Eurozone October CPI data

The German bunds slumped during European session Monday as investors wait to watch the country’s unemployment change data for the month of October, scheduled to be released on October 30 by 08:55GMT and eurozone’s consumer price inflation (CPI) data for the similar period, due for release on October 31 by 10:00GMT, will add further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, jumped 3-1/2 basis points to 0.384 percent, the yield on 30-year note also climbed nearly 3-1/2 basis points to 1.023 percent and the yield on short-term 2-year traded 2-1/2 basis points higher at -0.644 percent by 10:15GMT.

Today should be a relatively quiet day for economic news from the euro area. But it’s set to be a busy remainder of the week, with  the most notable release perhaps the first estimates of GDP growth in Q3, with the euro area, French and Italian figures due tomorrow and the Spanish figures due Wednesday, Daiwa Capital Markets reported.

Also of significance this week will be the preliminary euro area inflation figures for October, also due on Wednesday. We might see a small uptick in the core rate, up 0.1ppt to 1.0 percent y/y. But while energy and food prices are set to continue rising, with base effects likely to keep their annual rates of growth little changed, the headline inflation rate should move sideways at 2.1 percent.

Among other top-tier releases due in the coming week, euro area unemployment data, similarly out on Wednesday, appear set to show that the euro area unemployment rate was unchanged in September at 8.1 percent. Meanwhile, after a downside surprise to the latest PMIs, the coming week’s European Commission Economic sentiment survey, due tomorrow, will be watched for further evidence of a deterioration in business sentiment at the start of Q4, the report added.

The headline economic sentiment indicator has been on a downward trajectory since the end of last year and a further weakening seems to be on the cards this time despite the slight improvement in consumer confidence. The week will end on Friday with the release of the final manufacturing PMIs. In the bond markets, Italy will issue BTPs tomorrow.

Meanwhile, the German DAX gained 1.12 percent to 11,326.35 by 10:20GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -82.68 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex