German bunds slide after March consumer price inflation meets market expectations

The German bunds slid Friday after the country’s consumer price inflation for the month of March met market expectations, while the Eurozone trade balance for February failed to cheer market participants.

The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.52 percent, the yield on 30-year note jumped nearly 1-1/2 basis points to 1.19 percent and the yield on short-term 2-year hovered around -0.57 percent by 09:05GMT.

It should be a relatively low-key end to the week for economic data from the euro area, although the weaker run of releases – which was extended yesterday with February’s IP figures (down 0.8 percent m/m to make it highly likely that the sector contracted over Q1 as a whole) – seems likely to be extended.

In particular, the latest euro area trade figures are expected to show that the region’s surplus in February remained little changed close to EUR20 billion, albeit with a softer performance for both exports and imports.

With yesterday’s equivalent French number (up 0.4ppt to 1.7 percent y/y) and this morning’s German figure (up 0.3ppt to 1.5 percent y/y) also aligning with the preliminary estimates, next Wednesday’s final euro area report should confirm the rise of 0.2ppt to 1.4 percent y/y in the headline annual rate of CPI. 

Meanwhile, the German DAX rose 0.47 percent to 12,473.29 by 09:10GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -55.62 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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