U.S. 10-year Treasury yields highest since March on bets of hawkish Fed Chair appointment

The U.S. 10-year Treasury yield hit a 7-month high Wednesday as markets prepare to experience a more hawkish Federal Reserve Chair to replace Janet Yellen after she retires from the position in early February. Also, investors are awaiting the 5-year auction scheduled to be held later today by 17:00GMT.

The yield on the benchmark 10-year Treasury jumped 4 basis points to 2.44 percent, the super-long 30-year bond yields surged 3-1/2 basis points to 2.95 percent and the yield on the short-term 2-year note too climbed 3-1/2 basis points to 1.61 percent by 11:30GMT.

This followed a surge in the fortunes of Stanford University’s John Taylor, known for advocating a rules-based approach to monetary policy, as a candidate either for the role of Fed chair when Janet Yellen’s term expires early next year, or vice-chair, a post which is also vacant after the retirement of Stanley Fischer this month.

The PredictIt betting market showed that Mr. Taylor’s chances of winning the top job rose from 17 to 31 percent during the day. Jerome Powell, a current Fed board member regarded as a centrist, remained the favorite with a 53 percent chance, FT reported.

Meanwhile, the S&P 500 Futures traded 0.15 percent lower at 2,563.50 by 11:30GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 30.68 (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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