The German bunds slumped during European session Monday ahead of the country’s 10-year auction, scheduled to be held on February 27 by 10:40GMT. Also the country’s consumer price inflation (CPI) data for the month of February, coupled with manufacturing PMI and unemployment change for the similar month, due by end of this week will add further direction to the debt market.
In addition, eurozone’s February CPI data, due on Friday, will add further insight into the debt market.
The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.119 percent, the yield on 30-year note also climbed 2 basis points to 0.738 percent and the yield on short-term 2-year remained 1 basis point higher at -0.554 percent by 10:00GMT.
This week’s euro area data calendar brings further results of February sentiment surveys, including the Commission’s business and consumer confidence indices on Wednesday and the final manufacturing PMIs on Friday.
While the flash consumer confidence indicator in the past week posted a larger-than-expected improvement in February, business sentiment is expected to have edged further lower, to leave the Commission’s headline economic sentiment indicator similarly down slightly this month to 106.0, which would be a fresh 26-month low. The final euro area manufacturing PMI, meanwhile, is likely to align with this week’s preliminary reading showing the headline index dropping 1.3pts to a 5-1/2-year low of 49.2, Daiwa Capital Markets reported.
Likely of more interest on Friday will be the euro area’s flash estimate of February inflation – we expect the headline and core CPI rates to move sideways at 1.4 percent y/y and 1.1 percent y/y respectively. Ahead of this, the week will bring the equivalent national releases from Germany, France, Italy and Spain on Thursday. Other releases of note in the coming week include euro area bank lending figures and unemployment numbers, both for January, on Wednesday and Friday respectively, the report added.
Meanwhile, the German DAX remained 0.29 percent higher at 11,489.98 by 10:10GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -49.38 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex


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