German bunds plunge post Eurozone’s higher-than-expected April consumer price inflation

The German bunds plunged Friday after reading the Eurozone’s higher-than-expected consumer price inflation for the month of April, which added to the disappointment in safe-haven assets.  

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 5 basis points to 0.35 percent, the long-term 30-year bond yields surged nearly 5-1/2 basis points to 1.12 percent and the yield on short-term 2-year bond traded 2 basis points higher at -0.72 percent by 09:20 GMT.

Eurozone inflation rebounded in April, with the annual rate climbing to 1.9 percent after surprisingly plunging in the previous month. Annual consumer price rises are now back to the European Central Bank’s (ECB) target of just under 2 percent having slumped to 1.5 percent in March, according to a first estimate from Eurostat. The reading was above an average forecast of 1.8 percent.

A separate poll of professional economic forecasts compiled by the ECB showed economists expect inflation to hit 1.8 per cent “in the longer term”, signalling that this is the level they think is consistent with the central bank’s inflation target.

Meanwhile, the German stock index DAX Index traded 0.07 percent higher at 12,453.50 by 09:20 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 20.39 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex