German bunds remain narrowly ahead of Q4 2018 GDP, Eurozone December trade balance

The German bunds remained narrowly mixed during European session Wednesday ahead of the country’s gross domestic product (GDP) for the fourth quarter of 2018, scheduled to be released on February 14 by 07:00GMT and the eurozone’s Q4’18 GDP as well, due on the same day by 10:00GMT for further insight into the debt market.

The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.123 percent, the yield on 30-year note hovered around 0.751 percent while the yield on short-term 2-year remained tad higher at -0.566 percent by 10:10GMT.

According to data released by the Eurostat, industrial output in the 19-country currency union fell 0.9 percent month-on-month for a 4.2 percent year-on-year decline. the production of capital goods, like machinery, fell by 1.5 percent in December against November and year on year the fall was 5.5 percent, accelerating from 4.4 percent in November.

In the markets, after Friday saw 10-year Bund yields slip below 0.1 percent, and the 10-year spread of BTPs over Bunds briefly touch 300bps, the bond auctions from Germany and Italy will be watched.

Lastly, after yesterday saw the typically hawkish Dutch central bank governor Knot recognise that the case for tightening had diminished, instead advocating a ‘wait-and-see’ approach to policy, ECB Governing Council members Lane (soon-to-be chief economist) and Villeroy (potential successor to Draghi) are also scheduled to speak publicly.  

Meanwhile, the German DAX remained tad higher at 11,131.88 by 10:15GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 32.87 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex