German bunds plunge ahead of 10-year auction, manufacturing PMI

The German bunds plunged Tuesday as investors remain keen to watch the 10-year auction, scheduled to be held on March 22 which will remain crucial in determining the future direction of the bond market.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped nearly 3 basis points to 0.46 percent, the long-term 30-year bond yields climbed 2-1/2 basis points to 1.21 percent and the yield on short-term 2-year bond also traded 2-1/2 basis points higher at -0.75 percent by 08:40 GMT.

Germany's producer prices increased at the fastest pace in more than five years in February, figures from Destatis showed Monday. Producer prices advanced 3.1 percent in February from the previous year, the fastest since December 2011, when prices gained 3.5 percent. Prices had climbed 2.4 percent in January.

Lastly, Germany’s manufacturing PMI for the month of March will also be eyed by investors, scheduled to be released on March 24.

Meanwhile, the German stock index DAX Index traded 0.37 percent lower at 12,051.50 by 08:40 GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 149.76 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex