German bunds slide despite lower-than-expected in January manufacturing PMI; eyes on ECB’s monetary policy decision

The German bunds slid Wednesday as investors have largely shrugged-off the lower-than-expected manufacturing PMI for the month of January. Investors are now awaiting the European Central Bank’s (ECB) monetary policy decision, scheduled to be unveiled on January 25 for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.56 percent, the yield on 30-year note hovered around 1.30 percent and the yield on short-term 2-year too climbed nearly 1 basis point to -0.58 percent by 09:00GMT.

The softer pace of expansion in manufacturing output was reflected in the IHS Markit Flash Germany Manufacturing PMI dipping from a record high of 63.3 in December to 61.2. Although the lowest in three months, the latest reading still pointed to an overall rate of growth that was faster than at any other time in the past six-and-a-half years.

Further, the IHS Markit Flash Germany Composite Output Index registered a reading of 58.8 in January, little-changed from December’s 80-month high of 58.9, with the quickest growth of services businesses activity since March 2011 offsetting a slower, but still-strong, increase in goods production.

Meanwhile, the German DAX slipped -0.11 percent to 13,546.50 by 09:10 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -30.00 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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