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German bunds slightly gain after Eurozone November CPI disappoints investors

The German bunds gained slightly during European session Friday after Eurozone’s consumer price inflation (CPI) for the month of November disappointed market participants. Also, the country’s retail sales for the month of October also missed market expectations, further adding to gains in debt prices.

The German 10-year bond yields, which move inversely to its price, slipped nearly 1 basis point to 0.315 percent, the yield on 30-year note also remained tad lower at 0.991 percent and the yield on short-term 2-year traded nearly flat at -0.598 percent by 10:35GMT.

Euro area annual inflation is expected to be 2.0 percent in November, down from 2.2 percent in October, according to a flash estimate from Eurostat, the statistical office of the European Union.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in November (9.1 percent, compared with 10.7 percent in October), followed by food, alcohol & tobacco (2.0 percent, compared with 2.2 percent in October), services (1.3 percent, compared with 1.5 percent in October), and non-energy industrial goods (0.4 percent, stable compared with October).

Further, according to preliminary results of the Federal Statistical Office (Destatis), theretail companies in Germany implemented real (price-adjusted) in October 2018 5.0 percent more than in the same month of the previous year. Nominal (i.e. not price-adjusted) was 7.1 percent more than in October 2017. Both in real terms and in nominal terms, these were the highest increases since May 2017.

Meanwhile, the German DAX remained 0.64 percent lower at 11,226.4 by 10:40GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 34.13 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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