German Bunds climb as institutions lower growth outlook

The German bonds gained on Wednesday as International Monetary Fund and German leading economic institute cuts 2016 economic growth outlook. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, moved down 3.75 pct to 0.155 pct and the yield on the 3-year Treasury bond dipped 1.32 pct to -0.511 pct by 1010 GMT.

The International Monetary Fund lowered its world growth estimates for 2016 and 2017 on Tuesday in its latest World Economic Outlook. The French growth outlook was reduced to 1.1 pct, as compared to earlier forecast of 1.3 pct.

The German Institute of Economic Research will lower their growth forecast for Europe's largest economy for this year to 1.6 pct from 1.8 pct previously. The institutes expect growth to further slow in 2017, with GDP predicted to expand by around 1.5 pct. The institutes will publish their growth estimates on Thursday and the government is expected to update its own forecast on April 20.

Also, the German bunds have been closely following developments in oil markets because of their impact on inflation expectations. The crude oil prices also lost ground early Wednesday as traders took profit following the overnight surge, underscoring the growing mixed views that key oil producers could agree on a production freeze this Sunday. 

Meanwhile, the International benchmark Brent futures fell 0.78 pct to $44.35 and West Texas Intermediate (WTI) tumbled 1.85 pct to $41.39 by 1010 GMT.