German bunds surge after composite, services PMI disappoints in October

The German bunds surged Monday after the country’s composite as well as services PMI disappointed during the month of October. However, the upside was limited by the rise in Eurozone composite PMI for the same period.

The German 10-year bond yields, which move inversely to its price, jumped 2-1/2 basis points to 0.34 percent, the yield on 30-year note also plunged 2-1/2 basis points to 1.05 percent while the yield on short-term 2-year traded 1 basis point lower at -0.76 percent by 10:05GMT.

The seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index was at 54.7 in October, down from September’s six-month high of 55.6 (and below the flash estimate of 55.2) but still indicative of a robust rate of expansion. The latest figure was slightly above the average recorded in the third quarter, and indeed for the year so far (54.5).

Manufacturing output displayed a similar trend to that of services activity, rising at a slower rate than in September, but still sharply overall. The seasonally adjusted final IHS Markit Germany Composite Output Index dipped to 56.6, down from September’s 77-month high of 57.7.

Lastly, the final IHS Markit Eurozone PMI Composite Output Index posted 56.0 in October, down from 56.7 in September, but above the earlier flash estimate of 55.9. The headline index has signalled expansion in each of the past 52 months.

Meanwhile, the German DAX traded 0.19 percent down at 13,452.50 by 10:20 GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -97.79 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest