Eurozone periphery bonds lose ahead of benchmark German 10-year auction

The Eurozone periphery bonds lost Wednesday as investors wait to watch the benchmark Germany’s 10-year auction, scheduled to be held later today. Also, the euro area’s composite PMI and retail sales for the month of June, due on August 3 will provide further direction to the debt market.

The benchmark German 10-year bond yields, which moves inversely to its price, rose 1 basis point to 0.49 percent, the French 10-year bond yields climbed 1-1/2 basis points to 0.76 percent, Irish 10-year bond yields hovered around 0.79 percent, Italian jumped 2-1/2 basis points to 2.04 percent, Netherlands 10-year bond yields higher by 1-1/2 basis points at 0.61 percent, Portuguese equivalents surged 5-1/2 basis points to 2.89 percent and the Spanish 10-year yields traded 2-1/2 basis points higher at 1.47 percent by 08:10GMT.

Germany’s Markit Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of the German economy, fell to a five-month low of 58.1 in July from 59.6 in June.

Further, the pace of growth in the Eurozone climbed to 0.6 percent in the three months to June, in line with an average forecast from economists and a steady pace of expansion that will encourage policymakers. Quarterly growth edged up from 0.5 percent at the start of the year, while year on year growth leapt to 2.1 percent from 1.9 percent, according to official figures from Eurostat.

Meanwhile, the pan-European STOXX 600 index fell 0.10 percent to 379.88, German DAX up 0.08 percent to 12,263.50, France’s CAC 40 nearly flat at 5,127.80 and the PSI20 Index traded 0.20 percent lower at 5,226.31 by 08:10 GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 136.41 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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