German bunds surge ahead of Q4 GDP, January consumer price inflation

The German bunds surged as investors await the country’s fourth-quarter gross domestic product (GDP), scheduled to be released on February 14 by 07:00GMT. Also, market participants are eyeing the 30-year auction, besides the January CPI and eurozone’s GDP, all due on the same day for further direction in the debt market.

The German 10-year bond yields, which move inversely to its price, slumped 3 basis points to 0.72 percent, the yield on 30-year note plunged 2-1/2 basis points to 1.33 percent and the yield on short-term 2-year traded 1 basis point lower at -0.58 percent by 08:45GMT.

After a slow start to the working week yesterday, today’s euro area economic data flow remains particularly light. Most notably, we have already seen the latest labor market figures released in France this morning. Employment growth remained steady in Q4, at 0.3 percent, an unchanged pace from Q3, and only a touch softer from the rate of growth seen in the first half of the year.

Despite the strong output growth in manufacturing, the level of employment remained unchanged in this sector, but construction and market services saw increases of 0.4 percent q/q.  But steady employment growth appears to have been insufficient to generate an additional upward pressure on pay growth. Indeed, the pace of monthly wage growth also remained unchanged at 1.3 percent y/y.

Meanwhile, the German DAX fell 0.32 percent to 12,246.87 by 08:50GMT, while at 08:00GMT, the FxWirePro's Hourly Euro Strength Index remained neutral at -31.43 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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