German bunds nearly flat as investors await Yellen’s speech

The German 10-year bund yields continued to hover between -0.05 percent to -0.10 percent mark Friday as markets look to be holding steady in advance of Federal Reserve Chair Janet Yellen’s Jackson Hole speech on Friday.

The yield on the benchmark 10-year bond hovered around -0.077 percent mark, the yield on long-term 30-year note remained steady at 0.444 percent and the yield on short-term 2-year bond stood unchanged at -0.612 percent by 08:40 GMT.

Moreover, the Germany’s bunds have been closely following developments in oil markets because of their impact on inflation expectations. The crude oil prices declined as US stockpiles increased by 6.6 million barrels in the week ended August 19 to a record high of 1.4 billion barrels, said the Energy Information Administration.

Also, Iraq prepared to increase its exports and renewed concerns that upcoming producer talks will not rein in oversupply. Also, worries about expanding Chinese fuel exports dragged oil prices. The International benchmark Brent futures fell 0.89 percent to $49.22 and West Texas Intermediate (WTI) dipped 0.23 percent to $47.22 by 08:40 GMT.

On Wednesday, Germany’s gross domestic product expanded during the second quarter, following higher proportion of state expenses, coupled with surge in exports and private consumption. Further, the upbeat economic growth offset the weaker investment by companies in Europe's biggest economy.

Germany expanded 0.4 percent in Q2, with exports adding 0.6 percentage points to GDP as exports rose 1.2 percent on the quarter and imports inched down 0.1 percent, data released by Federal Statistics Office Destatis showed Wednesday.

Meanwhile, the German stock index DAX Index traded 0.36 percent lower at 10,494 by 08:40 GMT.