German bunds trade narrowly mixed as investors eye ECB policy decision

The German bunds traded narrowly mixed Wednesday as investors await the European Central Bank (ECB) monetary policy meeting scheduled to be held on December 8.

The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1-1/2 basis points to 0.35 percent, the yield on long-term 30-year note dipped 1-1/2 basis points to 1.02 percent and the yield on short-term 2-year bond bounced 1 basis point to -0.69 percent by 08:30 GMT.

The European Central Bank is expected to announce a six-month extension to its quantitative easing program next week, according to a majority of economists polled by Reuters, who also expect the bank to keep the size of its monthly asset purchases unchanged.

We also foresee that the European Central Bank is expected to keep its interest rate unchanged with maintaining the QE 80 billion euros a month as the Eurozone inflation hit a 31-month high in November, data showed on Wednesday.

Moreover, crude oil prices declined as investors chased in profit after a long rally ahead of OPEC and non-OPEC meeting on Saturday. The International benchmark Brent futures fell 0.40 percent to $53.70 and West Texas Intermediate (WTI) dipped 0.57 percent to $50.64 by 08:30 GMT.

Meanwhile, the German stock index DAX Index traded 1.30 percent higher at 10,915 by 08:40 GMT. While at 08:00 GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish for third straight day at +102.62 (higher than +75 represents bullish trend).