Eurozone periphery bonds rally on nervous buying; OPEC worries rise on disagreement

The Eurozone periphery bonds rallied Wednesday following gains in benchmark German bunds as investors remained cautious ahead of OPEC meeting decision.

The French 10-year bond yields, which moves inversely to its price, fell 4-1/2 basis points to 0.67 percent, Irish 10-year bonds yield dipped 5 basis points to 0.81 percent, Italian equivalent slid 4 basis points to 1.93 percent, Netherlands 10-year bonds yield ticked 3 basis points lower to 0.360 percent and the Spanish 10-year bonds yield tumbled 3 basis points to 1.50 percent by 10:20 GMT.

The Eurozone bonds have been closely following developments in oil markets because of their impact on inflation expectations, which is below the target level of European Central Bank. Crude oil prices rallied ahead of OPEC ministerial gathering in Vienna today. The International benchmark Brent futures rose 5.62 percent to $50 and West Texas Intermediate (WTI) jumped 3.80 percent to $46.95 by 09:20 GMT.

The Organization of the Petroleum Exporting Countries (OPEC) is meeting officially in Vienna later in the day to discuss a planned production cut in an effort to curb overproduction that has dogged markets and more than halved prices since 2014.

There remains disagreement among OPEC-members over which producers should cut by how much, and a plan for non-OPEC oil giant Russia to participate has so far also failed.

According to recent media news, Iran will not freeze oil output but said there is another arrangement.

Meanwhile, the pan-European STOXX 600 index was up 0.05 percent and the euro-area blue-chip gauge the STOXX 50 climbed 0.42 percent, the DAX traded 0.17 percent higher, the PSI20 Index climbed 1.03 percent and the CAC-40 rose 0.35 percent by 10:20 GMT.

While at 10:00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at +22.34 (higher than +75 represents bullish trend).