The German bunds remained flat during European trading session Monday even as the country’s trade balance data for the month of February came in better than market expectations ahead of the European Central Bank’s (ECB) monetary policy meeting, scheduled to be held on April 10 by 11:45GMT, which shall provide further direction to the debt market.
The German 10-year bond yields, which move inversely to its price, remained flat at 0.001 percent, the yield on 30-year note slipped 1 percent to 0.628 percent and the yield on short-term 2-year hovered around -0.574 percent by 09:50GMT.
The main event in the euro area this week will be the conclusion of the ECB’s latest policy meeting on Wednesday. At last month’s meeting, the ECB revised down significantly its forecasts for GDP and inflation, Daiwa Capital Markets reported.
And so, the Governing Council amended its forward guidance to make clear that its key interest rates are expected “to remain at their present levels at least through the end of 2019”. And it also confirmed its intention to hold a new round of quarterly targeted long-term refinancing operations (TLTRO-III), starting in September 2019 and ending in March 2021.
The maturity of each operation will be two years, half that of the previous TLTRO-II programme, while counterparties will be entitled to borrow up to 30 percent of the stock of eligible loans as at February 28, 2019 at a rate indexed to the refi rate over the life of each operation.
The back end of the week will also bring final readings of March CPI from Germany and France (Thursday) and Spain (Friday). These figures are likely to confirm the flash estimates, showing that on an EU-harmonised measure German and French CPI eased 0.3ppt to 1.4 percent y/y and 1.3 percent y/y respectively, while Spanish inflation rose 0.2ppt to 1.3 percent y/y. Supply-wise, Germany will sell 2030 linkers tomorrow and 5-year bonds on Wednesday, the report added.
Meanwhile, the German DAX slipped 0.42 percent to 11,957.92 by 10:05GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 111.85 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex


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