German bunds surge on disappointing December employment report; CPI in focus

The German bunds surged during early European session of the last trading day of the week Friday after witnessing disappointment in the country’s employment report for the month of December, while eyes still remain on the consumer price inflation (CPI) for the similar period, due for release today by 13:00GMT for further direction in the debt market.

The German 10-year bond yield, which move inversely to its price, plunged 6-1/2 basis points to -0.284 percent, the yield on 30-year note slumped 7-1/2 basis points to 0.235 percent and the yield on short-term 2-year traded nearly 3 basis points down at -0.637 percent by 10:20GMT.

Germany's jobless rate held close to historic lows in December, official data released by Destatis showed Friday, while the number of unemployed jumped to 8,000, widely topping market expectations of 2,000, compared to previous reading of -16,000.

"Incoming orders for the German industrial sector are stabilising visibly. Support is coming in particular from abroad, whereas domestic orders fell sharply again, especially in October. As the leading indicators are also stabilising, we expect German industry's new orders to be solid in November, up 0.6 percent on the previous month (consensus: 0.2 percent)," Commerzbank commented in its latest research report.

Meanwhile, the German DAX slumped -1.47 percent to 13,188.67 by 10:25GMT.