German bunds slump after June manufacturing PMI, eurozone composite PMI exceeds expectations

The German bunds slumped during European trading session Friday after the country’s manufacturing PMI for the month of June and the eurozone’s composite PMI for the similar period, both exceeded market expectations, also rising from that in May.

The German 10-year bond yields, which move inversely to its price, jumped 3 basis points to -0.292 percent, the yield on 30-year note surged 3-1/2 basis points to 0.284 percent and the yield on short-term 2-year traded 3 basis points higher at -0.716 percent by 10:50GMT.

Lower goods production contributed to the headline IHS Markit Flash Germany Manufacturing PMI remaining below the no-change mark of 50.0 in June. The four other components (new orders, employment, suppliers’ delivery times and stocks of purchases) also had negative influences on the headline figure. Nonetheless, the PMI edged higher to a four-month high of 45.4, from 44.3 in May.

The IHS Markit Eurozone Composite PMI rose to 52.1 in June, according to the preliminary ‘flash’ estimate, up from 51.8 in May to reach its highest since last November. The reading puts growth in the second quarter up slightly on that seen in the first quarter, yet still the second-lowest since the fourth quarter of 2014.

Meanwhile, the German DAX traded flat at 12,348.06 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 58.51 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex