German bunds plummet ahead of Q3 GDP, November manufacturing PMI

The German bunds plummeted during afternoon session Wednesday ahead of the European Central Bank’s (ECB) account of monetary policy meeting, due on November 22 by 12:30GMT.

Besides, Germany’s gross domestic product (GDP) for the third quarter of this year and November manufacturing PMI, both due on November 23 by 07:00GMT and 08:30GMT respectively, will add further direction to the debt market.

The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.370 percent, the yield on 30-year note rose 1-1/2 basis points to 1.030 percent and the yield on short-term 2-year traded higher at -0.649 percent by 09:35GMT.

Today is set to be uneventful on the euro area data-front. But the European Commission is set to publish its opinions on the member states’ budgetary plans, including the revised Italian document submitted last week.

On this, the Commission is likely to reiterate its previous criticisms, noting again that the budgetary plan represents a ‘significant deviation’ from what was required under the EU rules, meriting the launch of a formal Excessive Deficit Procedure against Italy, Daiwa Capital Markets reported.

Nevertheless, having risen yesterday back to within a whisker of the post-election peaks, BTP spreads have narrowed significantly this morning (10-year spread currently down more than 10bps) on reports that the Italian government might be ready to make further amendments to its plans.

Meanwhile, the German DAX rose 0.65 percent to trade at 11,137.99 by 09:40GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 107.70 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex