German bunds gain ahead of ECB’s account of December policy meeting, President Lagarde’s speech

The German bunds gained during European trading session Thursday ahead of the European Central Bank’s account of its December monetary policy meeting, scheduled to be released today by 12:30GMT, followed by President Christine Lagarde’s speech, also due to be delivered today by 18:00GMT.

The German 10-year bond yield, which move inversely to its price, slipped nearly 1 basis point to -0.213 percent, the yield on 30-year note remained tad down at 0.299 percent and the yield on short-term 2-year too traded 1/2 basis point lower at -0.599 percent by 11:00GMT.

The most notable release today will be the ECB’s account from its 12 December Governing Council meeting, the first to be chaired by President Lagarde. On that occasion, policy was left unchanged, with the ECB’s interest rates, monthly asset purchases and forward guidance all unamended, Daiwa Capital Markets reported.

So, the Governing Council left open the door to further rate cuts. But the post-meeting press conference also suggested that Lagarde was keen not to preempt the findings of the ECB’s scheduled strategic policy review, which is now underway and might not conclude before year-end, the report added.

The account will no doubt be closely watched for any insight into the Governing Council’s assessment of the economic outlook and how policy might evolve over coming quarters, Daiwa further noted in the report.

"But we might expect it to underscore expectations that policy is unlikely to change for a while yet. And this evening’s speech by Lagarde in Frankfurt will undoubtedly attract attention too," Daiwa commented.

Meanwhile, the German DAX edged tad -0.25 percent down to 13,396.86 by 11:10GMT.