German bunds surge after March manufacturing PMI misses expectations, IFO (Institute for Economic Research) business climate index in line with estimates
Source: FxWire Pro - Commentary / 22 Mar 2018 05:57:12 Eastern Standard Time
The German bunds surged during European session Thursday after the country’s manufacturing PMI for the month of March missed market expectations, also falling as compared to the reading in February. However, the Ifo business climate index was in line with consensus estimates, although not rendering much reaction to the debt market.
The German 10-year bond yields, which move inversely to its price, slumped nearly 4 basis points to 0.55 percent, the yield on 30-year note also plunged nearly 4 basis points to 1.18 percent and the yield on short-term 2-year too traded nearly 1-1/2 basis points lower at -0.58 percent by 09:25GMT.
The IHS Markit Flash Germany Composite Output Index, registered a reading of 55.4 in March, down from 57.6 in February. Although remaining solid overall, growth has now softened in each of the past two months after having reached a nearly seven-year high in January.
Services business activity rose at the slowest pace since last August, while manufacturing output showed the weakest increase in 14 months. This slower expansion in factory output was reflected in a further correction in the IHS Markit Flash Germany Manufacturing PMI, which dipped from 60.6 in February to 58.4 in March, down for the third straight month and its lowest reading since July last year.
Meanwhile, the German DAX fell 0.83 percent to 12,207.76 by 09:30GMT, while at 09:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bearish at -81.52 (higher than +75 represents bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex
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