German bunds lose strength despite fall in August Eurozone CPI; July unemployment rate unchanged

The German bunds lost ground during European session Friday after investors have shrugged-off the fall in Eurozone’s consumer price inflation (CPI) data for the month of August. Further, eurozone’s unemployment rate for the month of July remained unchanged, meeting market expectations as well.

The German 10-year bond yields, which move inversely to its price, rose 1/2 basis point to 0.354 percent, the yield on 30-year note rose nearly 1 basis point to 1.031 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points to -0.605 percent by 09:20GMT.

Euro area annual inflation came in at 2.0 percent in August 2018, down from 2.1 percent in July 2018, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in August (9.2 percent, compared with 9.5 percent in July), followed by food, alcohol & tobacco (2.5 percent, stable compared with July), services (1.3 percent, compared with 1.4 percent in July) and non-energy industrial goods (0.3 percent, compared with 0.5 percent in July).

The euro area (EA19) seasonally-adjusted unemployment rate was 8.2 percent in July 2018, stable compared with June 2018 and down from 9.1 percent in July 2017. This is the lowest rate recorded in the euro area since November 2008. The EU28 unemployment rate was 6.8 percent in July 2018, down from 6.9 percent in June 2018 and from 7.6 percent in July 2017. This is the lowest rate recorded in the EU28 since April 2008. These figures are published by Eurostat, the statistical office of the European Union.

Meanwhile, the German DAX slipped nearly 1 percent to 12,375.50 by 09:45GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -90.81 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex