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<b>Crude Oil</b>: 12m target $50/bbl – Goldman Sachs

Oil fundamentals have weakened sharply since OPEC announced a tentative agreement to cut production and analysts at Goldman Sachs now expect …The post <b>Crude Oil</b>: 12m target $50/bbl – Goldman Sachs appeared first on crude…

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Australian Bonds Gain Following Firmness in U.s. Treasuries

The Australian government bonds gained Thursday following firmness in the United States Treasuries amid stronger demand in 5-year note auction and weak equities.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 8-1/2 basis points to 2.78 percent, the yield on 15-year note also dipped 8-1/2 basis points to 3.25 percent, while the yield on short-term 2-year slid 7 basis points to 1.94 percent by 04:40 GMT.

The Australian bonds have been closely following developments in the U.S. debt market. The benchmark 10-year bonds witnessed strong buying in the 5-year auction, dragging yields by 7 basis points to 2.49 percent. The USD34 billion 5-year note auction came in at 2.057 percent (5.64 percent award at high) with a bid-to-cover ratio of 2.72, non-comps of USD50.9 million, an indirect bid of 71.4 percent and a direct bid of 4.1 percent.

Also, the U.S. equities moved downwards with the Dow index declining -111.36 points or -0.56 percent to 19,833.68. Meanwhile, the S&P 500 index was down -18.96 points or -0.84 percent to 2,249.92.

On Tuesday, the minutes from the December board meeting demonstrated their range of concerns as well as highlighting the positives within current conditions. The board was rightly concerned about the potential harm to global economic growth if the US were to enact policies that restrict trade. The board lists this issue as one of uncertainty and one that will unfold over 2017. Trade is not a zero-sum game and misguided policy has the potential to harm living standards in the US as well as in its trading partners.

Despite these areas of softness, the board is still of the belief that inflation will return to the RBA’s target band over time. The RBA remains overly optimistic regarding economic activity and inflation. If activity and inflation remain below their forecasts ‘over time’ then there is a strong chance the RBA is not done cutting rates in this cycle.

However, we expect that the easier monetary policy has helped to bolster country’s demand, as the Reserve Bank of Australia reacted to sub-target inflation by cutting the official rate by 50 basis points during the last year to 1.50 percent. Additionally, the RBA’s policy stance in 2017 will completely depend on the developments in consumer inflation and in the event that the Australian dollar appreciates. The RBA’s first monetary policy meeting for 2017 is scheduled to be held on Tuesday, February 7.

Meanwhile, the benchmark Australia’s S&P/ASX 200 index traded 0.48 percent higher at 5,660.5 by 04:40 GMT. While at 04:00 GMT, the FxWirePro’s Hourly Australian Dollar Strength Index remained slightly bullish at +86.89 (higher than +75 represent a bullish trend).

The material has been provided by InstaForex Company –

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After its defeat in Libya’s Sirte, Daesh rearranges fighters in western Libya

Libyan security authorities said on Wednesday that the Daesh militant group is rearranging its fighters that had fled from the northern city of Sirte, in training camps in the west of the country. The joint army and police forces of Bani Walid, which are loyal to the Tripoli’s UN-backed government, said on their Facebook page that Daesh is rearranging its forces in the West after incurring defeat in the northern city of Sirte. The Bani Walid joint forces  said in the Facebook page that the militant group is rearranging its forces that had fled from Sirte, and holding training camps in the area of Al-Haram and some of the surrounding valleys between the cities of Bani Walid and Awlad Bousayf.