German bunds plunge as unemployment rate falls to record low

The German government bunds plunged Tuesday after the country’s rate of unemployment fell to an all-time low during the month of January. However, markets largely shrugged off weaker-than-expected retail sales data.

Further, investors now look forward to the release of manufacturing PMI, along with the 30-year bund auction, scheduled to be unveiled on Wednesday.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 3-1/2 basis points to 0.48 percent, the long-term 30-year bond yields also surged 3 basis points to 1.20 percent and the yield on short-term 2-year bond rose 1/2 basis point at -0.67 percent by 09:10 GMT.

Germany's Federal Statistics Office said the unemployment rate dipped to a seasonally adjusted 5.9 percent this month from 6.0 percent in December. Analysts expected the jobless rate to hold steady in January. Further, the number of unemployed people declined by a seasonally adjusted 26,000 from a month earlier, compared to forecasts for a drop of 5,000. Jobless claims fell by 20,000 in December.

Also, investors shall remain hooked to the European Central Bank (ECB) President Mario Draghi’s speech, scheduled for later in the day for further direction in the bond market.

Meanwhile, the German stock index DAX Index traded 0.20 percent higher at 11,706.25 by 09:10 GMT, while at 9:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 2.21 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex