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German bunds edge tad higher after May industrial production disappoints investors; 10-year auction eyed

The German bunds edged tad higher during European session Monday after the country’s industrial production for the month of May disappointed market investors, while eyes still remain on the 10-year auction, scheduled to be held on July 10 by 09:40GMT for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, slipped 1-1/2 basis points to -0.373 percent, the yield on 30-year note also edged 1-1/2 basis points lower to 0.230 percent and the yield on short-term 2-year remained flat at -0.741 percent by 10:30GMT.

German IP for May slightly ditched market estimates, albeit still consistent with a weak second quarter. In particular, having dropped 2.0 percent m/m in April, industrial production rose 0.3 percent m/m, compared to expectations of 0.4 percent m/m, Daiwa Capital Markets reported.

Manufacturing output rose a firmer 0.7 percent m/m, following a drop of 2.0 percent the previous month, with output of capital goods up 2.0 percent from a drop of 2.7 percent in April, the report added.

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