German bunds slump despite lower-than-expected July trade balance, Eurozone Q2 GDP

The German bunds slumped during late European session Friday as investors have largely shrugged-off the country’s lower-than-expected trade balance for the month of July and Eurozone’s gross domestic product (GDP) for the second quarter of this year.

The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.371 percent, the yield on 30-year note also climbed 2 basis points to 1.047 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.576 percent by 11:10GMT.

Germany’s goods trade figures saw the value of exports fall in July by 0.9 percent m/m, while imports rose 2.8 percent m/m leaving the trade surplus on a seasonally adjusted basis at EUR15.8, the lowest in five years.

Eurozone’s seasonally adjusted GDP rose by 0.4 percent in both the euro area (EA19) and the EU28 during the second quarter of 2018, compared with the previous quarter, according to an estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2018, GDP had also grown by 0.4 percent in both areas.

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.1 percent in both the euro area and the EU28 in the second quarter of 2018, after +2.4 percent and +2.3 percent respectively in the previous quarter.

Following yesterday’s disappointing German manufacturing orders figures, expectations for today’s industrial production data were not very positive. And, indeed, this morning’s release showed a fall in output of 1.1 percent in July, representing an accelerated decline from the 0.7 percent m/m reverse in June.

Meanwhile, the German DAX slipped 0.19 percent to 11,932.07 by 11:15GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -92.27 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex