German bonds slump after manufacturing PMI surges in August; Q2 GDP in focus

The German government bonds slumped Tuesday after the country’s manufacturing PMI surged during the month of August. Also, investors remained focussed to read the country’s second-quarter gross domestic product, scheduled to be released on August 25 by 06:00GMT

The German 10-year bond yields, which moves inversely to its price, jumped 1-1/2 basis points to 0.41 percent, the yield on 30-year note also climbed 1-1/2 basis points to 1.16 percent and the yield on short-term 2-year traded nearly 1 basis point higher at -0.71 percent by 09:40GMT.

The IHS Markit Flash Germany Composite Output Index registered 55.7 in August, up from 54.7 in July and indicating a sharp overall rate of expansion. The index was broadly in line with its trend level over the past 12 months (55.6). Output has risen continuously since May 2013, the second-longest sequence of growth since the series started in January 1998.

"Overall, the PMI data for the third quarter so far and the upward revisions to official data suggest that IHS Markit’s current growth forecast for 2017, at 2.0 percent, is likely to be raised," said Trevor Balchin, Senior Economist at IHS Markit

Meanwhile, the German DAX fell 0.06 percent to 12,219.00 by 10:00 GMT, and the FxWirePro's Hourly Euro Strength Index remained neutral at 39.59 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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