German bunds suffer despite lower-than-expected rise in Eurozone July CPI; eyes on August manufacturing PMI

The German bunds suffered during European trading session Monday even after eurozone’s consumer price inflation (CPI) for the month of July rose lower than market expectations, with eyes still on the Germany’s manufacturing PMI for the similar month, scheduled to be released on August 22 for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, jumped 4 basis points to -0.644 percent, the yield on 30-year note surged 9 basis points to -0.127 percent and the yield on short-term 2-year traded nearly stable at -0.906 percent by 10:20GMT.

According to the report released by Eurostat, the euro area’s annual inflation rate was 1.0 percent in July 2019, down from 1.3 percent in June. A year earlier, the rate was 2.2 percent. European Union annual inflation was 1.4 percent in July 2019, down from 1.6 percent in June.

A year earlier, the rate was 2.2 percent. These figures are published by Eurostat, the statistical office of the European Union. The lowest annual rates were registered in Portugal (-0.7 percent), Cyprus (0.1 percent) and Italy (0.3 percent). The highest annual rates were recorded in Romania (4.1 percent), Hungary (3.3 percent), Latvia and Slovakia (both 3.0 percent).

Compared with June, annual inflation fell in fifteen Member States, remained stable in two and rose in eleven. In July, the highest contribution to the annual euro area inflation rate came from services (+0.53 percentage points, pp), followed by food, alcohol & tobacco (+0.37 pp), non-energy industrial goods (+0.08 pp) and energy (+0.05 pp).

Meanwhile, the German DAX rose nearly 1 percent to 11,677.03 by 10:25GMT.