German bunds slip after June CPI remains unchanged; ECB June meeting minutes in focus

The German bunds slipped during European session Thursday after the country’s consumer price inflation (CPI) for the month of June, released early today, remained unchanged ahead of the European Central Bank’s (ECB) account of monetary policy meeting for the month of June scheduled to be released in a short while today.

The German 10-year bond yields, which move inversely to its price, jumped nearly 2-1/2 basis points to -0.281 percent, the yield on 30-year note also surged 2-1/2 basis points to 0.334 percent and the yield on short-term 2-year traded flat at -0.722 percent by 10:40GMT.

All eyes today will be on the ECB account from its early-June meeting – when the Governing Council amended its forward guidance to state that rates are expected to remain at their present levels at least through the first half of 2020 – for any further insights into whether a rate cut is likely to be forthcoming at its meeting in two weeks’ time, Daiwa Capital Markets reported.

Data-wise, we have already seen the only notable euro area economic data of the day in the form of final June inflation figures from the largest two member states. And these might have reduced marginally the case for a rate cut as soon as this month, with an unusual upwards surprise to today’s German figures, as the headline EU-harmonised inflation rate was revised up from the flash release by 0.2ppt to 1.5 percent y/y, also 0.2ppt higher than the May reading, the report added.

Meanwhile, the German DAX traded tad -0.22 percent lower at 12,346.75 by 11:00GMT