FRANKFURT (dpa-AFX) - The prices of German federal bonds rose slightly on Tuesday. By the afternoon, the benchmark futures contract Euro-Bund-Future climbed 0.05 percent to 133.59 points. The yield for ten-year Bunds was at 2.42 percent.

The renewed deterioration in sentiment in the German economy provided only temporary support for bonds. The Ifo business climate fell in July for the third month in a row. The drop was also larger than expected. "After the third decline in a row, the Ifo business climate is pointing just as clearly downward as the other leading indicators," commented Commerzbank chief economist Jorg Krämer. "Even if German GDP should have risen somewhat in the second quarter, the broad-based decline in leading indicators points to a renewed contraction of the German economy in the second half of the year."

Markets are waiting for the European Central Bank's (ECB) monetary policy decisions on Thursday. An interest rate hike of 0.25 percentage points is considered a foregone conclusion. However, it remains to be seen what will happen after that. According to Krämer, the current data is likely to strengthen the position of members who are against further rate hikes after Thursday's meeting. The U.S. Federal Reserve Fed will already publish its interest rate decision on Wednesday./jsl/he