German bunds surge after Turkey’s political crisis worsens; Eurozone July CPI remains unchanged

The German bunds surged during European session Friday after Turkey’s political crisis worsened, with the United States threatening to impose higher economic sanctions if the former refuses to set free a detained American pastor.

In addition, eurozone’s consumer price inflation (CPI) data for the month of July remained unchanged from its previous reading in June.

The German 10-year bond yields, which move inversely to its price, slumped 2-1/2 basis points to 0.29 percent, the yield on 30-year note also plunged 2-1/2 basis points to 0.95 percent while the yield on short-term 2-year traded 2 basis points lower at -0.64 percent by 10:40GMT.

According to a report from BBC News, Andrew Brunson has been held in Turkey for nearly two years over alleged links to outlawed political groups. The dispute over his release has seen the two NATO allies impose tariffs on one another's goods. Also, the crisis has instigated widespread selling in other emerging markets, sparking fears of a global crisis.

Further, latest data released by Eurostat showed that euro area annual inflation rate was 2.1 percent in July 2018, up from 2.0 percent in June 2018. A year earlier, the rate was 1.3 percent. European Union annual inflation was 2.2 percent in July 2018, up from 2.1 percent in June. A year earlier, the rate was 1.5 percent.

Meanwhile, the German DAX slipped 0.28 percent to 12,202.91 by 10:50GMT, while at 10:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -25.95 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex