German bunds continue to fall ahead of 30-year auction, ECB President Draghi’s speech

The German bunds continued to fall Tuesday as investors wait to watch the country’s 30-year auction, due to be held on April 11 and the European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be released on the same day by 11:00GMT.

The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.49 percent, the yield on 30-year note also fell nearly 1 basis point to 1.16 percent and the yield on short-term 2-year traded tad lower at -0.56 percent by 08:20GMT.

Last week’s figures sent mixed messages about industrial production growth in the major euro area economies. German industrial production declined by 1.6 percent m/m in February, but the equivalent Spanish indicator increased at a similar rate. And today’s figures from France were more aligned with the latter. Following a steep decline of 1.8 percent at the start of the year, production increased by 1.2 percent in February.

While activity in the mining, quarrying, and energy production category rose 11.5 percent m/m and in construction by 2.8 percent m/m, manufacturing output was disappointing, declining for a fourth consecutive month, by 0.6 percent m/m. And looking at the quarter as a while, the January-February average of the total IP was actually 1.2 percent lower compared to Q4, suggesting that French industrial production most likely will post a decline in Q1.

Meanwhile, the German DAX rose 1.01 percent to 12,384.24 by 08:25GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 17.38 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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