Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The German 10-year bund yields continued to hover between -0.05 percent to -0.10 percent mark Wednesday as markets look to be holding steady in advance of European Central Bank (ECB) monetary policy meeting scheduled next week.
The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around -0.090 percent mark, the yield on long-term 30-year note remained steady at 0.424 percent and the yield on short-term 2-year bond dipped ½ basis points to -0.623 percent by 09:30 GMT.
The Eurozone preliminary August CPI inflation rate comes in at 0.2 percent y/y, unchanged from the previous month and below the consensus forecast of 0.3 percent. This is not surprising in light of the downward surprise in the German CPI reported yesterday.
Additionally, the ex-energy & unprocessed food rate also remained unexpectedly steady at 0.8 percent y/y. Therefore, this report will keep the ECB concerned about too-low inflation in its monetary policy meeting, which is scheduled to be delivered on September 8. We foresee that there are higher possibilities of another small deposit rate cut by the central bank.
On Tuesday, Germany's Federal Statistical Office in its report showed that country’s consumer price index (CPI) remained steady at 0.4 percent y/y, bit lower than the market expectations of 0.5 percent y/y rise, as compared to 0.4 percent in July. On the monthly CPI was flat, from 0.3 percent in July.
Moreover, Harmonized Index of Consumer Prices (HICP) fell 0.1 percent in August, against 0.4 percent print in July. On an annual basis, HICP slowed to a rise of 0.3 percent y/y, from 0.4 in July.
In addition, the German bonds have been closely following developments in oil markets because of their impact on inflation expectations. Crude oil prices declined as the US dollar rallied and oversupply worries grew amid forecasts for higher US crude inventories.
Iran said it would only cooperate in talks to freeze output if other exporters recognized its right to full regain market share. Also, data showed that Iraq is producing 3.205 million barrel per day in August compared to 3.202 million barrel per day in July. The International benchmark Brent futures fell 0.51 percent to $48.48 and West Texas Intermediate (WTI) dipped 0.45 percent to $46.14 by 09:30 GMT.
Meanwhile, the German stock index DAX Index traded 0.19 percent lower at 10,635 by 09:40 GMT.
