German bunds gain on short covering; Eurozone CPI in focus

The German government bunds gained Thursday as investors covered previous short postions. Also, market now awaits to read the European Central Bank’s (ECB) account of monetary policy meeting, scheduled to be released later in the day.

Further, investors wait to watch Eurozone’s January consumer price inflation data, scheduled to be released next week.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell over 1 basis point to 0.36 percent, the long-term 30-year bond yields also plunged 1-1/2 basis points to 1.18 percent while the yield on short-term 3-year bond moved lower by 1/2 basis point to -0.77 percent by 09:00 GMT.

The German bunds have been closely following developments in oil markets because of their impact on inflation expectations. The International benchmark Brent futures moved higher 0.16 percent to USD55.84 and West Texas Intermediate (WTI) rose 0.09 percent to USD55.85 by 09:10 GMT.

Further, Germany’s exports climbed 1.2 percent last year to EUR1.2 trillion (USD1.3 trillion), the Federal Statistics Office in Wiesbaden reported on Thursday, while imports rose 0.6 percent to EUR954.6 billion. That left Germany’s trade surplus at EUR253 billion in 2016.

Meanwhile, the German stock index DAX Index traded 0.19 percent lower at 11,771.50 by 09:10 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 63.80 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex