German bunds jump tracking U.S. Treasuries after attack on Iranian military general

The German bunds jumped during European session at the start of week Monday tracking a similar movement in the United States’ Treasuries after the U.S. killed a top Iranian military general Soleimani, which in turn, weighed on stocks and hence, investors’ sentiments

The German 10-year bond yield, which move inversely to its price, slipped 1 basis point to -0.292 percent, the yield on 30-year note also fell 1 basis point to 0.239 percent and the yield on short-term 2-year traded 1-1/2 basis points down at -0.633 percent by 10:25GMT.

A busy week for euro area economic data has got underway this morning with a welcome upside surprise from the latest German retail sales figures. In particular, following a drop of 1.3 percent m/m in October, sales rebounded in November by 2.1 percent m/m, the most in ten months, to be up 2.8 percent y/y, Daiwa Capital Markets reported.

Overall, however, that left them trending little changed from  Q3, suggestive of somewhat softer growth in German household consumption in Q4 than the 0.4 percent q/q pace the prior quarter. The equivalent euro area retail sales figures for November are due tomorrow and seem highly likely also to report a rebound, albeit likely closer to 1.0 percent m/m, the report added.

"Looking further ahead, the flash estimate of euro area inflation in December is also due tomorrow – the headline rate is expected to rise 0.3ppt to 1.3 percent y/y due principally to energy prices. The core measure is expected to remain unchanged, also at 1.3 percent y/y, but the latest spike in the oil price obviously represents an upside risk to the near-term inflation outlook," Daiwa further commented in the report.

Meanwhile, the German DAX slumped -1.47 percent to 13,188.67 by 10:30GMT.