German bunds slump despite lower-than-expected June manufacturing PMI; Eurozone PMIs cheer investors

The German bunds slumped during European session Friday even as the country’s manufacturing PMI for the month of June came in lower than market expectations. However, eurozone’s PMIs cheered investors, thus lending sluggishness to bond prices.

The German 10-year bond yields, which move inversely to its price, jumped nearly 2 basis points to 0.34 percent, the yield on 30-year note remained tad higher at 1.12 percent and the yield on short-term 3-year traded 1 basis point up at -0.59 percent by 09:00GMT.

The IHS Markit Flash Germany Manufacturing PMI slipped to an 18-month low of 55.9 in June from 56.9 in May. The drop in the index reflected not only weaker output growth but also slower increases in new orders and stocks of purchases, as well as slight reduction in the incidence of supply chain delays.

The IHS Markit Eurozone Composite PMI rose from 54.1 in May to 54.8 in June, according to the flash reading (which is based on approximately 85 percent of usual replies). While an improvement on the 18-month low seen in May, the June reading represented the second-weakest expansion seen over the past 17 months, highlighting how the pace of business activity growth has eased since the turn of the year. At 54.7, the second quarter average PMI reading is the weakest since the end of 2016.

Meanwhile, the German DAX traded 0.37 percent higher at 12,561.09 by 09:15GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bullish at 98.13 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex