German bunds remained mixed ahead of ECB President Draghi’s speech, 10-year auction

The German bunds remained mixed during European trading session Tuesday ahead of a speech by European Central Bank (ECB) President Mario Draghi, scheduled to be held on June 12 by 12:15GMT and the country’s 10-year auction, also due on the same day by 09:40GMT.

The German 10-year bond yields, which move inversely to its price, plunged 12 basis points to -0.221 percent, the yield on 30-year note slumped 23 basis points to 0.389 percent and the yield on short-term 2-year suffered 13 basis points to -0.658 percent by 10:00GMT.

Markets have already seen the only noteworthy release from the euro area, with the Bank of France’s latest business survey suggesting that conditions remained broadly stable in May. Admittedly, the headline indicator for industrial sector sentiment was a touch weaker than expected, moving sideways at 99, the lowest level since October 2016 and still just below the long-term average, Daiwa Capital Markets reported.

While manufacturers reported a pickup in production last month – with the chemicals, IT and electronic sectors seemingly particularly buoyant – they expect IP to remain little changed in June. This was the assessment of services and construction firms too.

So, the headline survey indices for services and construction were also unchanged at 100 and 105 respectively, with the former representing the lowest level since July 2017. This notwithstanding, the Bank of France still expected GDP growth to remain unchanged this quarter at 0.3 percent q/q, a pace that matches our Daiwa’s own forecast, the report added.

Meanwhile, the German DAX traded 1.27 percent higher at 12,198.88 by 10:10GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 50.41 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex