German bunds snap gains as investors shrug off worse-than-expected December trade deficit

The German government bunds snapped gains Thursday after investors shrugged-off worse-than-expected trade balance data for the month of December. Also, investors are eyeing the release of fourth-quarter gross domestic product (GDP) and consumer price inflation data, scheduled to be released on February 14.

The yield on the benchmark 10-year bond, which moves inversely to its price, rose 1 basis point to 0.30 percent, the long-term 30-year bond yields also rose nearly 1 basis point to 1.08 percent and the yield on short-term 2-year bond moved higher by 1 basis point to -0.78 percent by 08:40 GMT.

Germany’s exports climbed 1.2 percent last year to EUR1.2 trillion (USD1.3 trillion), the Federal Statistics Office in Wiesbaden reported on Thursday, while imports rose 0.6 percent to EUR954.6 billion. That left Germany’s trade surplus at EUR253 billion in 2016.

Weaker output in manufacturing and construction drove the biggest monthly drop in German industrial production in nearly eight years, data showed on Tuesday. Industrial output fell by 3.0 percent on the month, data from the Economy Ministry showed. This was much weaker than the consensus forecast in a Reuters poll for a rise of 0.3 percent and the steepest drop since January 2009.

Meanwhile, the German stock index DAX Index traded 0.20 percent higher at 11,566.50 by 08:50 GMT, while at 8:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bearish at -46.77 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex