2016.05.0604:31:00UTC+00European Bonds mixed ahead of U.s. Payroll Data

The European bonds were trading mixed on Friday as investors await U.S. payroll data. The benchmark German 10-year bonds yield, which is inversely proportional to bond price fell 1bps to 0.158 pct, French 10-year bunds yield climbed 1bps to 0.543 pct, Italian equivalents jumped 3bps to 1.529 pct, Spanish 10-year bonds yield inched higher 3bps to 1.616 pct, Portuguese 10-year bonds yield rose 4bps to 3.334 pct, Netherlands 10-year bonds yield stood unchanged at 0.407 pct and British 10-year bonds yield dipped 2bps to 1.448 pct by 0815 GMT.

The April Labour Department employment situation report will be released on Friday (1230 GMT), in which non-farm payrolls is expected to increase 200k, from prior 215k in March. Alongside no change is anticipated in the unemployment rate of 5.0 pct. On the other hand, the German bunds have been closely following developments in oil markets because of their impact on inflation expectations. Today, crude oil prices tumbled overnight on profit booking and surging dollar that at least temporarily outweighed output after wildfire in Canada disrupted its oil sands production, while escalating fighting in Libya threatened the North African nation's output. The International benchmark Brent futures fell 0.93 pct to $44.59 and West Texas Intermediate (WTI) dipped 0.79 pct to $ 43.97 by 0710 GMT.

Yesterday, the European Central Bank in its latest economic bulletin concluded that it is crucial to ensure that the low inflation environment doesn't get entrenched via second-round effects on wage or price-setting. Further added that they will monitor the inflation outlook and if warranted act by using all available instruments.

The markets will now focus on the next week’s March industrial production on Thursday (0900 GMT) and Q1 GDP on Friday (0900 GMT). Meanwhile, the pan-European STOXX 600 index was down 0.53 pct and the euro-area blue-chip gauge, the STOXX 50 dipped 0.23 pct. The FTSE 100 Index fell 0.48 pct, the DAX trading 0.46 pct lower and the CAC-40 tumbled 0.68 pct by 0820 GMT.