German bunds slump ahead of ECB President Draghi’s speech, June manufacturing PMI

The German bunds slumped during European trading session Wednesday ahead of a speech from European Central Bank (ECB) President Mario Draghi, scheduled to be delivered today by 14:00GMT and the country’s manufacturing PMI for the month of June, due to be released on June 21 by 07:30GMT for further direction in the debt market.

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 also surged 3 basis points to 0.301 percent and the yield on short-term 2-year traded 3-1/2 basis points higher at -0.708 percent by 10:55GMT.

After yesterday’s market-moving comments from Mario Draghi, the ECB’s Sintra Forum on Central Banking will conclude today with further sessions on the future of EMU, including a panel discussion to be chaired by Executive Board member Benoît Cœuré, as well as closing remarks from the ECB President, Daiwa Capital Markets reported.

Data-wise, the news will be relatively prosaic, with figures on construction output and balance of payments data for April. With production in the sector up 0.2 percent m/m in Germany but down 2.3 percent m/m in France, a second successive monthly decline in overall euro area construction output seems highly likely. Meanwhile, in the bond market, Germany will sell 30-year Bunds, the report added.

Meanwhile, the German DAX traded flat at 12,333.68 by 11:05GMT, while at 11:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -78.47 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex