German bunds slip ahead of August trade balance, September CPI

The German bunds traded tad lower during European session Tuesday ahead of the country’s trade balance data for the month of August, scheduled to be released on October 10 by 06:00GMT and the consumer price inflation (CPI) for the month of September, due for release on the following day by 06:00GMT for further direction in the debt market.

The German 10-year bond yield, which move inversely to its price, slipped 1 basis point to -0.584 percent, the yield on 30-year note hovered around -0.092 percent and the yield on short-term 2-year too remained 1 basis point down at -0.763 percent by 10:15GMT.

For a welcome change, this morning has brought some slightly better data from Germany’s manufacturing sector, with industrial production rising for the first month in three in August, albeit by a relatively paltry 0.3 percent m/m, insufficient to reverse the drop the prior month, Daiwa Capital Markets reported.

Within the detail, output of manufacturing and mining also rose for the first time since May, up 0.7 percent m/m following a decline of 0.6 percent m/m in July. Production of capital goods and intermediate goods were both up about 1 percent m/m while that of consumer goods fell for a third consecutive month and at a similar rate, the report added.

Lastly, production of construction and energy both fell by about 1-1/2 percent m/m, with the latter thus declining to a new post-reunification low 16 percent below its level a year earlier as the retreat from coal-fired power generation continues, Daiwa further noted in the report.

Meanwhile, the German DAX traded -1.00 percent down at 11,974.21 by 10:20GMT.