German bunds plunge as Fed Chair Yellen confirms December rate hike

The German bunds plunged Friday after the Federal Reserve Chair Janet Yellen in her testimony to the Joint Economic Committee (JEC) of Congress confirmed that the central bank will hike its interest rate in December.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 3 basis points to 0.306 percent, the yield on long-term 30-year note jumped 3-1/2 basis points to 0.927 percent and the yield on short-term 3-year bond bounced 1 basis point to -0.63 percent by 09:20 GMT.

The German bunds have been closely following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield jumped 5-1/2 basis points to 2.32 percent. The probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 96 percent.

Federal Reserve Chair Janet Yellen, in her congressional testimony, strengthened bets that the central bank was on the right path to hike interest rates in December. This was the first direct signal from the Fed after December last year.

Meanwhile, the German stock index DAX Index traded 0.11 percent lower at 10,673.50 by 09:20 GMT. While at 09:00 GMT, the FxWirePro's Hourly Euro Strength Index steadily approaches bearish trend, currently at -69.89 (lower than -75 represents bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex