The German bunds pumped up during European trading session Monday after the country’s manufacturing PMI for the month of September came in lower than market expectations, diving further into contraction territory.
Investors will now keep a close eye on Germany’s Ifo business climate index for the month of September, scheduled to be released tomorrow by 08:00GMT and the 10-year auction, due on September 25 by 09:40GMT for further direction in the debt market.
The German 10-year bond yield, which move inversely to its price, remained tad 1/2 basis point down at -0.507 percent, the yield on 30-year note slipped 1 basis point to 0.020 percent and the yield on short-term 2-year hovered around -0.703 percent by 10:20GMT.
The IHS Markit Flash Germany Composite Output Index – which is based on approximately 85 percent of usual monthly replies – registered 49.1 in September, down from 51.7 in August and its first reading below the 50 ‘no change’ threshold since April 2013. The rate of decline signalled was the steepest in almost seven years.
Growth of business activity in the service sector slowed sharply since August to one of the weakest rates seen over the past three years. Manufacturing fared even worse, however, recording an eighth straight monthly decrease in output and the steepest rate of decline since July 2012.
September’s IHS Markit Flash Germany Manufacturing PMI read 41.4, signalling the sharpest decline in business conditions across the goods-producing sector since the depths of the global financial crisis in mid-2009.
Meanwhile, the German DAX suffered -1.11 percent to trade at 12,329.50 by 10:25GMT.


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