German Bunds slump on firm Eurozone inflation figures

The German bonds plunged on Thursday after Eurozone March inflation data showed that the economies escaped from the deflation phase. The yield on the benchmark 10-year bunds, which moves inversely to its price, moved higher 5.42 pct to 0.502 pct and the yield on the 3-year Treasury bond rose 0.97 pct to -0.503 pct by 1020 GMT.

On monthly basis, Eurozone prices were up 1.2 pct (still way below the European Central bank 2 pct target), increased in the line of market expectation, as compared to 0.2 pct in February. On annually basis, CPI stood flat at 0 pct, from down 0.1 pct in February and core-CPI grew 1 pct y/y.

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, crude oil futures are trading lower around $44.00, down from $44.50 in the earlier session as Iran’s oil minister said that he will not attend the Doha oil talks at the weekend but an Iranian representative will be there. The International benchmark Brent futures fell 0.27 pct to $44.05 and West Texas Intermediate (WTI) tumbled 0.55 pct to $41.53 by 1040 GMT.

Lastly, Bunds down to 163.16 before bouncing well which is a decent support region although 163.67/71 region features ahead of here now. Resistance stacking up on top as well after 163.96 highs so far followed by a 164.03 gap then 61.8 pct Fibo of the sell off at 164.05 under which the market could still turn lower, last at 163.92. Cash already back to 0.13 pct after a 0.174 pct high ahead of trend down to 0.196 pct for today.