German bunds suffer after October manufacturing PMI cheers markets beyond expectations

The German bunds suffered during European session Monday after the country’s manufacturing PMI for the month of October cheered market participants beyond expectations. Focus will now remain on a host of 2-tier economic data throughout the week, for additional direction in the debt market.

The German 10-year bond yield, which move inversely to its price, gained 1 basis point to -0.365 percent, the yield on 30-year note jumped nearly 2 basis points to 0.145 percent while the yield on short-term 2-year remained flat at -0.661 percent by 10:10GMT.

Germany's manufacturing sector remained firmly in contraction at the start of the final quarter of the year, according to the latest PMI data from IHS Markit and BME. October saw further marked – albeit slower – decreases in both output and new orders, while employment dropped to the greatest extent since January 2010 and destocking efforts intensified.

The headline IHS Markit/BME Germany Manufacturing PMI – a single-figure snapshot of the performance of the manufacturing economy derived from indicators for new orders, output, employment, suppliers' delivery times and stocks of purchases – registered 42.1 in October, up slightly from 41.7 in September but still the second-lowest reading since June 2009.

Meanwhile, the German DAX remained 1 percent higher at 13,081.62 by 10:15GMT.