German bunds climb ahead of March employment report, consumer price inflation data

The German bunds climbed Tuesday as investors wait to watch the country’s employment report for the month of March, scheduled to be released on March 29 by 07:55GMT and the consumer price inflation (CPI) data, due by 12:00GMT will add detailed direction to the debt market.

The German 10-year bond yields, which move inversely to its price, hovered around 0.52 percent, the yield on the 30-year note edged nearly 1 basis point lower at 1.16 percent and the yield on short-term 2-year too traded flat at -0.59 percent by 09:00GMT.

On a busy day for euro area data, investors should keep an eye on the European Commission’s economic sentiment survey results for March. While trade-war talk was clearly foremost in investors’ minds last week, the significant weakening of the euro area flash PMIs – which saw the composite index fell to the lowest in more than a year – added to the sense of unease, suggesting that the risks to global growth might already be starting to tilt somewhat to the downside.

Having dropped for the second successive month in February to 114.1, a further decline in the Commission’s headline euro area economic sentiment index today to a six-month low of 113.3 is the Bloomberg consensus.

That would suggest a moderation of momentum broadly in line with our economic forecast of a gradual slowing in euro area GDP – but no marked deterioration – over coming quarters. But a much steeper drop, as seen in the flash PMIs, would certainly provide some sense of unease.

Meanwhile, the German DAX jumped 1.70 percent to 11,984.92 by 09:05GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 109.43 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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