German bunds slump ahead of eurozone retail sales, ECB President Lagarde’s speech

The German bunds slumped during European trading session Tuesday ahead of eurozone’s retail sales for the month of January, scheduled to be released on February 5 by 10:00GMT and the European Central Bank (ECB) President Christine Lagarde’s speech, also due to be delivered on the same day by 12:15GMT.

The German 10-year bond yield, which move inversely to its price, jumped 2-1/2 basis points to -0.411 percent, the long-term 30-year yield surged 3 basis points to 0.105 percent and the yield on short-term 2-year remained tad higher at -0.665 percent by 10:50GMT.

It should be a relatively quiet day for European top-tier releases, with euro area PPI figures for December to be accompanied by preliminary Italian CPI numbers for January.  These are expected to show that the annual rate of decline in euro area PPI inflation moderated at the end of last year on the back of energy prices, Daiwa Capital Markets reported.

Headline Italian CPI inflation, however, is likely to have moved sideways at just 1/2  percent y/y. Turning to the UK, after yesterday’s final manufacturing PMI was revised slightly higher in January to suggest stagnation in the sector having been contracting since last April, today’s construction PMI will likely tally with increasing signs of stabilisation in the housing market, with the headline index forecast to rise to an eight-month high, the report added.

Meanwhile, the German DAX jumped over 1 percent to trade at 13,191.61 by 10:55GMT.