German bunds suffer despite lower-than-expected November trade balance

The German bunds suffered during European trading session Thursday even as the country’s trade balance for the month of November came in lower than market expectations, albeit still in surplus.

The German 10-year bond yield, which move inversely to its price, jumped 2-1/2 basis points to -0.233 percent, the yield on 30-year note also surged 2-1/2 basis points to 0.316 percent while the yield on short-term 2-year slipped nearly 1-1/2 basis points to to -0.609 percent by 09:20GMT.

In November 2019, goods worth EUR112.9 billion were exported from Germany and goods worth EUR94.6 billion imported. As the Federal Statistical Office (Destatis) further reports on the basis of preliminary results, German exports in November 2019 were 2.9 percent lower and imports were 1.6 percent lower than in November 2018. Calendar and seasonally adjusted, exports rose compared to the previous month October 2019 by 2.3 percent and imports by 0.5 percent.

After yesterday’s disappointing factory orders figures, this morning’s German industrial production report provided better news. Overall IP rose a slightly larger-than-expected 1.1 percent m/m in November, while the extent of the drop in October was revised down to 1.0 percent m/m (compared to the fall of 1.7 percent m/m previously estimated), Daiwa Capital Markets reported.

Further, the headline IP figure got an extra boost from a leap in construction sector output, up 2.6 percent m/m and 5.4 percent y/y. But energy production slipped back 0.8 percent m/m (to be down 5.7 percent) after exceptionally strong growth in October, the report added.

Meanwhile, the German DAX jumped 1.24 percent to 13,485.96 by 09:30GMT.