German government bonds trading higher Tuesday, amid risk-off trades and after release of much weaker than expected German industrial output data. March Bund futures opened higher on risk-off trades as uncertainties in Greece continued to prevail and then squeezed higher in light volume. Bunds then eased off after the Dutch State Treasury opened its books for its new 10-year DSL via Dutch Direct Auction (DDA). Prices then recovered, taking cue from gains in UK Gilts ahead of the tap auction of the 2017 Gilt. Bunds then hit session high following release of much weaker than expected German industrial production data, which showed a fall of 2.9% m/m, +0.9% y/y in December – coming in far worse than MNI median estimate of -0.4% m/m, +4.1% y/y. Not much flow was reported, with volumes seen as light as traders await outcome of meeting with Greece’s PM Papademos and the three party leaders to see if they can reach an agreement on accepting conditions new bailout program. Also eyed are comments from Fed Reserve Chairman Bernanke who testifies on the economy to the Senate Budget Committee.
EasyForexNews Research Team