German bunds climb ahead of November ZEW economic sentiment, Q3 GDP

The German bunds climbed during European trading session Monday ahead of the country’s ZEW economic sentiment data for the month of November, scheduled to be released on November 12 by 10:00GMT and the gross domestic product (GDP) for the third quarter of this year, due on November 14 by 07:00GMT, for further insight into the debt market.

The German 10-year bond yield, which move inversely to its price, edged tad down to -0.271 percent, the yield on 30-year note slid 1 basis point to 0.222 percent and the yield on short-term 2-year traded 1-1/2 basis points down at -0.631 percent by 10:00GMT.

There are various top-tier euro area releases this week, including September industrial production figures on Wednesday, which are expected to show that output slipped back on the month to leave it down over Q3 as a whole for the second successive quarter, Daiwa Capital Markets reported.

Nonetheless, the updated estimate of euro area Q3 GDP growth the following day is expected to align with the flash estimate of 0.2 percent q/q (unchanged from Q2). Against this backdrop, euro area labour market figures (also due Thursday) are likely to show employment growth in Q3 no firmer than the 0.2 percent q/q rate in Q2, the report added.

Of course, of most interest on Thursday will be the first estimate of German Q3 GDP. Given the significant weakness in industrial and construction output in the third quarter, there is a significant risk that the economy slipped into a technical recession, with the consensus expectation for growth of -0.1 percent q/q.

"We are a touch less downbeat given the pickup in retail sales that quarter, admittedly merely forecasting GDP growth of zero in Q3," Daiwa further commented in the report.

Meanwhile, the German DAX edged tad -0.32 percent down to 13,187.79 by 10:10GMT.