German bunds gained Thursday as investors poured into safe-haven assets while moving away from the riskier assets, including equities and crude oil. Also, the rising tensions between the United States and Iran amid Iraq and the Kurds fight over the city of Kirkuk are pushing investors to buy safe-haven assets.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell more than 2 basis points to 0.386 percent, the yield on the long-term 30-year note also dipped nearly 2 basis points to 1.181 percent and the yield on short-term 2-year traded nearly 1/2 basis point lower at -0.722 percent by 08:40GMT.
The Bonds follow movements of the crude oil prices due to its impact on inflation expectations. The international benchmark for oil fell 1.50% to $57.47 per barrel as oil prices are on the back foot in Asia despite the talk of OPEC output cut extension and growing evidence of tighter US market.
Analysts and investors expect OPEC, Russia and other major producers extend the global output cut deal beyond its expiry date at the end of March 2018. Following this weakness oil prices, the benchmark stock index slumped over 0.50 percent to 12,986.
Brent oil prices could tumble more than 20 percent by 2018, as U.S. output surges and adds renewed pressure on an oil market that is already battling with a persistent oversupply, according to Ian Taylor, chief executive officer at Vitol Group, reported by MarketWatch,
Meanwhile, the DAX index fell 0.46 percent to 12,980.75 by 09:00 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained slightly bullish at 75.30 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex
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