German bunds surge on cheerful January unemployment change; eurozone CPI in focus

The German bunds surged during European trading session Thursday after the country’s unemployment change for the month of January made investors cheerful ahead of the eurozone’s consumer price inflation (CPI) for the similar period, scheduled to be released on January 31 by 10:00GMT.

The German 10-year bond yield, which move inversely to its price, slumped nearly 3 basis points to -0.399 percent, the long-term 30-year yield lost 2-1/2 basis points to 0.110 percent and the yield on short-term 2-year suffered 1-1/2 basis points to -0.653 percent by 10:50GMT.

Compared to the other eurozone surveys that have come out this month, the ESI was surprisingly upbeat with an increase to 102.8 from 101.3. German and French industry, in particular, became a lot more optimistic about the outlook and somewhat less pessimistic about recent production developments. These are signs that the bottom in manufacturing is now getting close, ING Economics reported.

Germany’s jobless rate topped 5 percent in January, majorly led by seasonal factors while also reflecting slower growth in Europe’s biggest economy, official data released showed Thursday.

The unadjusted unemployment rate, the headline figure in Germany, rose to 5.3 percent in January from 4.9 percent in December, the Federal Labor Agency said. In all, 2.426 million people were registered as unemployed in the country of 83 million. The figure was 198,000 higher than the previous month and 20,000 higher than a year earlier.

Meanwhile, the German DAX traded nearly 1 percent down at 13,233.87 by 10:55GMT.