The German bund yield rebounded on Thursday as investors cooled on safe-haven instruments amid gains in riskier assets including crude oil and equities.
The yield on the benchmark 10-year bond rose nearly 1-1/2 basis point to -0.165 percent, yield on super-long 30-year bonds jumped more than 2 basis points to 0.366 percent and the yield on 20-year note bounced 2 basis points to 0.192 percent by 09:10 GMT.
On Wednesday, as US Treasury yields reached record lows, the 10-year German yield has hit our latest target and record low of -0.20 percent. Considering that the 10-year T-note/Bund yield spread is narrowing to the low/mid- 150s, the path of least resistance is now for the Bund yield to proceed down towards -0.25 percent multi-day.
Lastly, the German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Today, crude oil prices edged higher for the second day, supported by a report of another fall in U.S. crude oil inventories and a weaker U.S. dollar, although a glut of refined products and economic growth concerns continued to loom over the market.
The American Petroleum Institute (API) said its data showed U.S. crude stockpiles fell by 6.7 million barrels last week, declining for a seventh week in a row. The International benchmark Brent futures rose 1.37 percent to $49.47 and West Texas Intermediate (WTI) jumped 1.43 percent to $48.11 by 09:10 GMT.
In terms of data, German industrial production for May came in weaker than expected at -1.3 percent m/m, the consensus was for no change, down from a downwardly revised +0.5 percent in April (previous was +0.8 percent).
Also, German Chamber of Commerce DIHK in its Brexit assessment concluded that the Germany exports to drop 1 percent in 2016 to the UK following Brexit vote. On the other hand, prior the organisation was estimating that exports will jump 5.0 percent in 2016. Furthermore, the organisation sees exports dipping -5.0 percent next year.
Meanwhile, the German stock index DAX Index climbed 0.96 percent at 9,458 by 09:10 GMT.
The material has been provided by InstaForex Company – www.instaforex.com