German bunds suffer despite lower-than-expected February trade balance; 30-year auction in focus

The German bunds suffered Monday after investors have largely shrugged-off the country’s lower-than-expected trade balance for the month of February, released early today. Investors are now awaiting the 30-year auction, scheduled to be released on April 11 for detailed direction in the debt market.

The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.50 percent, the yield on the 30-year note climbed a little above 1 basis point to 1.16 percent and the yield on short-term 2-year traded flat at -0.58 percent by 08:50GMT.

It should be a relatively uneventful week ahead in the euro area, with the economic data calendar showing only a few notable releases. This morning the latest German trade figures for the month of February brought no surprises – consistent with the disappointing retail industrial production indicators seen last week, they showed a sharp decline in the headline trade surplus to EUR19.2 billion (seasonally adjusted), the lowest level in more than a year.

The value of exports was down 3.2 percent, the steepest drop in two and a half years, while imports also declined, by 1.3 percent m/m. Nevertheless, on a 3m/3m basis both export and import growth remained positive at 1.2 percent and 2.1 percent respectively.

Meanwhile, the German DAX rose 1 percent to 12,361.27 by 08:55GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 41.54 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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