German bund yields plunge following dovish speech from ECB President Draghi, fall in eurozone CPI

The German bund yields plunged during European trading session Tuesday following a dovish speech from European Central Bank (ECB) President Mario Draghi, delivered early today, along with a fall in eurozone’s consumer price inflation (CPI) for the month of May.

The German 10-year bond yields, which move inversely to its price, plummeted 5-1/2 basis points to -0.303 percent, the yield on 30-year note plunged nearly 7-1/2 basis points to 0.271 percent and the yield on short-term 2-year slumped nearly 5 basis to -0.732 percent by 10:35GMT.

Speaking at the ECB Forum in Sintra, Portugal, Draghi delivered a defiantly dovish tone, saying that if the economic situation deteriorates in the coming months the bank would announce further stimulus, CNBC reported.

"The ECB foresees “lingering softness” in the short term, in particular due to geopolitical factors and trade conflicts, which have weighed on exports and on the manufacturing sector — two important drivers of economic growth in the euro zone," CNBC further noted.

Meanwhile, the German DAX surged over 1 percent to 12,217.05 by 10:40GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bearish at -134.70 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex