German bunds continue downtrend after Eurozone Q1 GDP matches expectations; all eyes on April CPI

The German bunds continued to fall Tuesday after Eurozone’s first quarter gross domestic product (GDP), released today, matched consensus estimates. Investors are all looking forward to the Eurozone’s April consumer price inflation (CPI), scheduled to be released on May 17 besides, Germany’s 30-year bund auction on late Wednesday which will provide detailed direction in the debt market.

The yield on the benchmark 10-year bond, which moves inversely to its price, climbed 1-1/2 basis points to 0.44 percent, the long-term 30-year bond yields also jumped 1-1/2 basis points to 1.26 percent and the yield on the short-term 1-year bond traded 1 basis point higher at -0.66 percent by 09:00 GMT.

Eurozone GDP increased 0.5 percent for the first quarter of 2017 which was in line with the preliminary reading released earlier in the month and the data also met consensus forecasts. GDP rose 0.5 percent for the fourth quarter of 2016 and the year-on-year rate was confirmed at 1.7 percent, down slightly from the 1.8 percent recorded for the previous quarter.

German GDP rose 0.6 percent for the quarter while the increase in Italy was held at 0.2 percent with French growth estimated at 0.3 percent. There was a fresh quarterly contraction in Greece while there was strong growth of 1.6 percent for Finland.

Meanwhile, the German stock index DAX Index fell 0.12 percent to 12,792.75 by 09:30 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 132.88 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex