German yields drop on weak data

FXStreet (Mumbai) - German bond yields dropped after the weak private sector data underscored the size and duration of of the ECB’s marathon QE program in buttressing the Eurozone’s fragile economic recovery.

Bund prices rose, sending the 10-year yield lower by 2.5 basis points to 0.135%, while the 2-year yield dropped one basis point to -0.26%. The 10-year yield hit a two-week high of 0.176% in early trading on diminishing fears of an imminent default in Greece.

However, the weak private sector data pushed yields lower. Markit's preliminary business activity survey for April came up short of forecasts in Germany and France, which dragged the Eurozone average lower.

Meanwhile, Greek yields fell 20 bps to 12.71% on signs of Greek government moving closer to an agreement with its international creditors. Greek newspaper Kathimerini reported on Thursday that the country is considering asking the European Stability Mechanism to buy Greek government bonds held by the European Central Bank to pay for debt redemptions this summer.