The German bunds slumped on Monday after the data showed that Germany factory orders rose higher-than-expected in March. Also, firm crude prices shifted investors from safe haven assets. The yield on the benchmark 10-year bonds, which moves inversely to its price rose 1bps to 0.158 pct and the yield on the 2-year bonds climbed 1bps to -0.509 pct by 1000 GMT.
The German Germany factory orders jumped 1.9 pct m/m, higher than the market expectation of 0.6 pct, from down 0.8 pct, previous revised up from -1.2pct. Moreover, the economics ministry said that overall industrial orders had a solid start to the year. Despite the overcast foreign trade environment, German industry was able to post a noticeable increase in orders from above.
The German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Today, crude oil prices jumped by more than 1 pct as a huge wildfire in Canada disrupted its oil sands production and strong Chinese oil imports last month. China’s crude imports rose 7.6 pct y/y in April, the third straight month that crude imports surpassed 30 million tons. The International benchmark Brent futures rose 1.74 pct to $46.16 and West Texas Intermediate (WTI) climbed 1.25 pct to $ 45.22 by 0850 GMT.
“Oil prices held as concerns over the impact of raging fires in Alberta,Canada, on supply from the oil sands projects lingered,” said ANZ economists in a research note on Monday.
The markets will now focus on the March exports data on Tuesday (0600 GMT), April CPI and Q1 GDP on Friday (0600 GMT). Meanwhile, the German stock index DAX Index rose 1.69 pct at 10,036, on rallying crude prices by 0850 GMT.
The material has been provided by InstaForex Company – www.instaforex.com