German bunds jump after Q3 GDP improves slightly; Eurozone October CPI eyed

The German bunds jumped during European trading session Thursday after the country’s gross domestic product (CPI) for the third quarter of this year improved slightly, surpassing market expectations as well.

Investors will now eye the eurozone’s consumer price inflation (CPI) for the month of October, scheduled to be released on November 15 by 07:00GMT for further direction into the debt market.

The German 10-year bond yield, which move inversely to its price, slumped 2-1/2 basis points to -0.326 percent, the yield on 30-year note plunged nearly 3-1/2 basis points to 0.155 percent and the yield on short-term 2-year suffered 2-1/2 basis points to -0.651 percent by 10:00GMT.

German Q3 GDP beat expectations, avoiding technical recession but growth of 0.1 percent q/q was far from vigorous. Indeed, the figure for Q2 was revised down slightly to show a contraction of 0.2 percent q/q, Daiwa Capital Markets reported.

And so German growth in Q3 failed to reverse fully that previous decline, and the annual growth rate ticked up just 0.2ppt to a still underwhelming 0.5 percent y/y, the second weakest in six years. While the detailed breakdown is still unavailable, the German statistical agency reported that growth came mainly from consumption, the report added.

Having fallen the most in almost six years in Q2, exports also rose, while imports were little changed. But while construction investment was firmer, capex in machinery and equipment disappointingly fell back, Daiwa further noted in the report.

Meanwhile, the German DAX traded tad down at 13,207.86 by 10:10GMT.