German bunds plunge as investors defy weaker-than-expected industrial production; ECB President Draghi’s speech eyed

The German bunds plunged Tuesday as investors defied the weaker-than-expected industrial production for the month of March. Also, market participants are closely eyeing the European Central Bank President Mario Draghi’s speech, scheduled to be held on May 10 for further direction in the debt market.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 1-1/2 basis points to 0.43 percent, the long-term 30-year bond yields jumped 2-1/2 basis points to 1.22 percent and the yield on the short-term 2-year bond traded nearly 1 basis point higher at -0.66 percent by 08:20 GMT.

The country’s industrial production fell by less than expected in March while trade proved resilient, data released showed Tuesday, supporting robust growth expectations for the first quarter. Industrial output edged down by 0.4 percent on the month, Tuesday's data from the Economy Ministry showed. This was better than the consensus forecast in a Reuters poll for a drop of 0.6 percent.

Further, the seasonally adjusted exports rose by 0.4 percent on the month, hitting a record high of EUR105.4 billion, coming in better than the consensus forecast in a Reuters poll for a rise of 0.2 percent.

Lastly, Germany's quarterly economic growth, to be released on Friday, is now expected to pick up to 0.6 percent in the first quarter from 0.4 percent in the final three months of last year, Reuters reported.

Meanwhile, the German stock index DAX Index traded 0.40 percent higher at 12,745.50 by 08:40 GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 23.13 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex