German bund yields jump after Fed hints at brake on raising rates; EU leaders’ summit in focus

The German bund yields slumped during European session Thursday after the Federal Reserve hinted at putting a brake on further rate hikes. Now, investors will take a close look at today’s European Union leaders’ summit, for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, slumped 3-1/2 basis points to 0.046 percent, the yield on 30-year note suffered 3 basis points to 0.704 percent and the yield on short-term 2-year traded flat at -0.537 percent by 10:25GMT.

In addition to Brexit, the two-day EU summit, which gets underway later today, will see leaders discuss the future development of the Single Market, the Capital Markets Union and (perhaps contentiously) industrial policy, as well as climate change and preparations for the upcoming EU-China summit. Data-wise, this afternoon will bring the Commission’s flash consumer confidence indicator for March, Daiwa Capital Markets reported.

This is expected to have posted another modest improvement for a third consecutive month, albeit still leaving the index on average in Q1 roughly ½pt below the average in Q4. The ECB will also publish its latest Economic Bulletin, while in the markets France and Spain will issue bonds with various maturities, the report added.

Meanwhile, the German DAX remained 0.89 percent higher at 11,761.84 by 10:30GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 45.96 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex