German bunds narrowly mixed in muted session ahead of November trade balance

The German bunds remained narrowly mixed during European session Wednesday amid a muted trading session that witnessed data of little economic significance ahead of the country’s trade balance data for the month of November, scheduled to be released on January 9 by 07:00GMT.

The German 10-year bond yield, which move inversely to its price, remained tad down at -0.286 percent, the yield on 30-year note traded flat at 0.261 percent and the yield on short-term 2-year slipped nearly 1 percent down to -0.631 percent by 10:10GMT.

This morning’s German factory orders data were a big disappointment. Contrary to the consensus expectation of a rise, orders in November fell 1.3 percent m/m, the most since July, to be down a hefty 6.5 percent y/y at the lowest level since February 2016, Daiwa Capital Markets reported.

The weakness in the latest month came from foreign orders, which followed two months of growth by dropping a steep 3.1 percent m/m, with orders from the euro area down 3.3%M/M and those from other countries down 2.8 percent m/m, the report added.

In contrast, domestic orders, which had seen the steepest declines over the course of 2019, rose 1.6 percent m/m.  By sector, the falls were concentrated in capital goods (down 2.1 percent m/m) while orders of intermediate and consumer items were little changed, Daiwa further noted in the report.

Meanwhile, the German DAX slipped tad -0.29 percent down to 13,186.33 by 10:20GMT.