German bunds trade range bound as investors shrug off upbeat economic data

The German bunds traded range bound Wednesday as investors remain sidelined in any big deal despite upbeat economic data.

The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 0.26 percent mark, the long-term 30-year bond yields dipped nearly 1 basis point to 1.01 percent and the yield on short-term 2-year bond remained steady at -0.78 percent by 09:30 GMT.

Germany’s consumer inflation rose 1.7 percent from a year ago, recording the biggest jump on record, the Federal Statistics Office in Wiesbaden said on Tuesday. Economists surveyed by Bloomberg predicted an increase of 1.3 percent. The reading is the strongest since July 2013 and follows a rate of 0.7 percent the previous month. Prices rose 1 percent from November.

Additionally, Germany Markit/BME services PMI rose to 54.3 in December, higher than the market expectations of 53.8, from previous 53.8 in November. Also, Markit's final composite Purchasing Managers' Index (PMI), rose to a five-month high of 55.2 in December from 55.0 in November.

German unemployment extended its decline in December amid signs that growth in Europe’s largest economy accelerated at the end of last year. The number of people out of work fell by a seasonally adjusted 17,000 to 2.638 million, data from the Federal Labour Agency in Nuremberg showed on Tuesday. Economists in a Bloomberg survey forecast a drop of 5,000. The jobless rate remained unchanged at 6 percent, matching the lowest level since reunification.

Meanwhile, the German stock index DAX Index traded 0.14 percent lower at 11,567 by 09:40 GMT. While at 09:00 GMT, the FxWirePro's Hourly Euro Strength Index stood neutral at -39.38 (lower than -75 represent a bearish trend).