German bunds slide on expectations of higher consumer inflation

The German government bunds slid Monday, following expectations of upbeat consumer price inflation, scheduled to be released later in the day.

Also, markets are eyeing the release of fourth quarter gross domestic product (GDP), scheduled to be released on January 30.

The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 3 basis points to 0.48 percent, the long-term 30-year bond yields also surged 3-1/2 basis points to 1.22 percent and the yield on short-term 2-year bond traded higher by 1 basis point at -0.65 percent by 09:10 GMT.

Germany’s inflation, as measured by the consumer price index (CPI) is likely to have accelerated in January by 2 percent year-on-year, following improvement in oil prices. However, food price inflation is expected to have remained unchanged in the month.

Lastly, markets will now be awaiting the release of German labor market data, along with eurozone’s consumer price inflation and GDP data by mid of next week. Also, investors shall remain hooked to the European Central Bank (ECB) President Mario Draghi’s speech, scheduled for Tuesday for further direction in the bond market.

Meanwhile, the German stock index DAX Index traded 0.59 percent lower at 11,745.45 by 09:20 GMT, while at 9:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 10.65 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex