German bunds gain despite better-than-expected April services PMI; March industrial production eyed

The German bunds gained during European trading session Monday after investors have largely shrugged-off the better-than-expected rise in the country’s services PMI for the month of April, released today, with eyes on the March industrial production data, scheduled for release on May 7 by 06:00GMT, for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.011 percent, the yield on 30-year note hovered around 0.663 percent and the yield on short-term 2-year traded tad lower at -0.604 percent by 09:20GMT.

Rising for the fourth month in a row in April, the headline seasonally adjusted IHS Markit Germany Services PMI Business Activity Index registered 55.7, up from 55.4 in March and its highest reading since last September. The index has a long-run average of 53.3 and has been above the 50.0 no-change mark in every month since June 2013.

Further, after falling to a near six-year low in March, the Composite Output Index showed a slight recovery at the start of the second quarter, climbing from 51.4 to 52.2. That said, the latest reading was still one of the lowest seen over the past six years. Strong growth in service sector business activity in April continued to contrast with a downturn in manufacturing production.

Meanwhile, the German DAX slumped over 2 percent to 12,157.00 by 09:25GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -63.47 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex