German bunds slump on strong factory activity; U.S. non-farm payrolls in focus today

The German bunds slumped Friday after August factory orders unexpectedly jumped in August after contracting in July, registering its biggest jump this year. This confirms that the eurozone’s largest economy is showing signs of solid domestic and foreign demand.

The German 10-year bond yields, which move inversely to its price, rose basis points to 3 basis points to 0.485 percent, the yield on 30-year note also jumped 2-1/2 basis points to 1.26 percent and the yield on short-term 3-year traded 1 basis point higher at -0.61 percent by 09:10GMT.

August factory orders climbed 3.6 percent after declining -0.4 percent in July. That was well above the 0.7 percent rise that economists forecast.

Domestic orders climbed 2.7 percent, highlighting the strength of the eurozone’s powerhouse economy. Foreign orders outside the eurozone soared 7.7 percent, indicating that the strong euro had not eaten into demand. However, notably, orders from elsewhere in the currency bloc declined 1 percent. The report tends to be volatile, but still, underscores the surprisingly bullish performance by the eurozone economy in 2017, FT reported.

Markets now focus on the upcoming US non-farm payroll data for September, which is expected to fall below the market expectations of 90K, down from 156K in August.

Meanwhile, the German DAX traded 0.07 percent higher at 12,977.25 by 09:30 GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 58.99 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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