German bonds flat after economic sentiment disappoints; ECB Vice President Constancio’s speech in focus

The German government bonds traded flat Tuesday after the country’s economic sentiment indicator for the month of August, released by Mannheim-based institute ZEW, disappointed markets, coming in below market expectations as well as from the previous reading in July

The German 10-year bond yields, which moves inversely to its price, hovered around 0.40 percent, the yield on 30-year note remained flat at 1.16 percent and the yield on short-term 2-year traded 1 basis point lower at -0.71 percent by 09:10GMT.

Germany August ZEW economic sentiment indicator posted a reading of 10.0 compared to expectations of 15.0 and lower than the prior reading of 17.5 in July. Also, ZEW economic sentiment indicator for Eurozone ditched estimates of 34.2, coming in at 29.3, from July’s 35.6.

"The significant decrease of the ZEW economic sentiment indicator reflects the high degree of nervousness over the future path of growth in Germany. Overall, the economic outlook still remains relatively stable at a fairly high level", Reuters reported, citing ZEW President Achim Wambach.

Meanwhile, the German DAX rose 0.63 percent to 12,143.00 by 09:40 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 3.21 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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