German bunds suffer following recovery in risk sentiment after U.S.-China trade tensions seem to ease

The German bunds suffered during European session Wednesday following a recovery in investors’ risk sentiments after a U.S.-China trade truce added hopes to financial markets. Also, a rebound in Eurozone’s industrial production for the month of October added fuel to debt prices.

The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.240 percent, the yield on 30-year note rose 1/2 basis point to 0.843 percent and the yield on short-term 2-year traded flat at -0.594 percent by 10:20GMT.

According to a report from Reuters, foreigners remained net buyers of Asian bonds during the month of December as fears over a U.S.-China trade dispute cooled down and U.S. yields also started to suffer.

Data from central banks and bond market associations showed overseas investors bought a net USD2.67 billion in Indonesian, Thai, South Korean, Indian and Malaysian bonds in the last month.

Further, eurozone’s industrial production witnessed a mild bounce during the month of October, rising to 0.2 percent m/m, in line with market expectations, but a tad higher than the -0.6 percent m/m seen in September, revised lower from -0.3 percent m/m.

Meanwhile, the German DAX jumped over 1 percent to 10,896.40 by 10:30GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at 14.68 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex