Eurozone periphery bonds remain mixed ahead of May CPI, Eurogroup meeting

The Eurozone periphery bonds traded mixed Thursday ahead of the zone’s consumer price inflation index (CPI), scheduled to be released on June 16. Also, the Eurogroup meetings, due later today will render further direction to the debt market.

The benchmark German 10-year bond yields, which moves inversely to its price, fell nearly 1 basis point to 0.25 percent, the French 10-year bond yields, remained flat at 0.60 percent, Irish 10-year bond yield plunged 7 basis points to 0.69 percent; however, Italian equivalent slumped 3-1/2 basis points to 1.94 percent, Netherlands 10-year bonds yield traded nearly 1 basis point lower at 0.48 percent, Portuguese equivalents nose-dived nearly 5 basis points to 2.88 percent and the Spanish 10-year yields traded 1-1/2 basis points lower at 1.41 percent by 09:20 GMT.

The Fed did what was expected; hiked 25 basis points, kept the forecasts of one further hike this year and three next unchanged, cut the inflation outlook, and suggested that balance sheet reduction will probably begin in September.

Today brings the latest Eurogroup meeting of euro area finance ministers, where issues related to the Greek bailout, including recent reform progress and possible debt relief measures, will be on the table. In addition, just like the German and Spanish final estimates already released earlier this week, the final estimates of French inflation in May released this morning aligned with the flash estimates, so that CPI on the EU harmonised measure fell 0.5ppt to 0.9 percent y/y.

Meanwhile, the pan-European STOXX 600 index was down 0.62 percent at 385.13, German DAX fell 0.60 percent to 12,729.50, France’s CAC 40 slumped 0.92 percent to 5,194.50, and the PSI20 Index traded 0.72 percent lower at 5,277.82 by 09:50 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index stood highly bearish at -123.12 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex