German bunds edge tad higher ahead of ECB President Draghi’s speech

The German bunds edged tad higher during European trading session Thursday amid silent trading hours that witnessed data of little economic significance ahead of the European Central Bank’s (ECB) President Mario Draghi’s speech, scheduled to be delivered today by 13:30GMT.

The German 10-year bond yield, which move inversely to its price, remained flat at -0.587 percent, the yield on 30-year note slipped 1-1/2 basis points to -0.148 percent and the yield on short-term 2-year too remained tad down at -0.727 percent by 11:10GMT.

The turnover at the top of the ECB continues. Ahead of Mario Draghi’s replacement by Christine Lagarde at the start of November, yesterday saw Sabine Lautenschläger announce her resignation as a member of the Executive Board more than two years before the end of her term. Since taking up her post in 2014, Lautenschläger was repeatedly one of the most hawkish members on the Governing Council, advocating the clichéd Bundesbank view and, as such, opposing the latest round of QE, Daiwa Capital Markets reported.

She will be replaced by another German, and probably another woman too. Claudia Buch, the current Bundesbank Vice President, would likely be one candidate who would also conform to type by following the traditional German line, the report added.

With respect to economic data, we have already seen the release of Germany’s GfK consumer confidence survey. And in marked contrast to the country’s downbeat business sentiment surveys earlier this week, this suggested that households expect a turn for the better at the start of Q4. Contrasting with the anticipated fall, the headline index was forecast to rise 0.2pt to 9.9 in October, a four-month high, nevertheless still well below its level a year earlier, Daiwa further reported.

Meanwhile, the German DAX edged tad 0.55 percent higher to 12,288.71 by 11:20GMT.