German bunds narrowly mixed after October services PMI beats expectations; 10-year auction eyed

The German bunds remained narrowly mixed during European session Tuesday after the country’s services PMI for the month of October beat market expectations. Investors will now be awaiting the 10-year auction, scheduled to be held on November 7 by 10:40GMT for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, hovered around 0.422 percent, the yield on 30-year note remained flat at 1.063 percent and the yield on short-term 2-year too traded tad lower at -0.646 percent by 09:20GMT.

The headline seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index registered 54.7 in October, down from September’s eight-month high of 55.9 and its lowest reading since July (but above the earlier ‘flash’ estimate of 53.6). The index was above its long-run average and signalled the continuation of a record sequence of growth that began in mid-2013.

Further, October saw the euro area economy expand at its slowest rate for more than two years, according to the final IHS Markit Eurozone PMI Composite Output Index. Despite coming in higher than the earlier flash estimate of 52.7, October’s final reading of 53.1 was down from the previous month’s 54.1 to the lowest since September 2016.

Meanwhile, the German DAX slipped 0.11 percent to 11,481.70 by 09:30GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 60.97 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex