German bund yields ease after long rally following U.S. Treasuries

The German bund yields eased Tuesday after a long rally following the United States Treasury prices.

The bund prices surged on election-inspired run-up in Treasury yields to 2016 highs over the last two weeks. This sends the benchmark Eurozone 10-year German yield nearly to 0.40 percent a week ago

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 4 basis points to 0.24 percent, the yield on long-term 30-year note dipped 4-1/2 basis points to 0.858 percent and the yield on short-term 2-year bond slid 2-1/2 basis points to -0.70 percent by 09:20 GMT.

The German bonds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield tumbled 4 basis points to 2.29 percent.

Also, the 10-year U.S. Treasury/Bund yield spread soared from around 165-175 basis points during the presidential election to over 200 basis points for the first time since 1989.

ECB President Draghi, speaking to the European Parliament, said that monetary support is needed to hit the European Central Bank's inflation target, even as monetary policy needs 'decisive' support from other actors.

Crude oil prices recovered on rising consensus that the OPEC will find a way to reduce production. The International benchmark Brent futures rose 1.33 percent to $49.55 and West Texas Intermediate (WTI) jumped 1.08 percent to $48.76 by 09:30 GMT.

On Monday, Chancellor Merkel of Germany has announced that she likes being chancellor and she would like to carry on being one if that is alright with everyone. There had been a little uncertainty in the markets about whether she would be a candidate in next year's election, reported UBS in its morning note.

Meanwhile, the German stock index DAX Index traded 0.53 percent higher at 10,740.50 by 09:30 GMT. While at 09:00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at +21.24 (higher than +75 represents bullish trend).