U.S. 10-year bond yields hit highest since July last year as sell-off resumes

The U.S. Treasuries were pushed lower across the curve Friday as heavy sell-off continued. The yield on the benchmark 10-year Treasury note rose 3 basis points to 2.40 percent and the yield on short-term 2-year note jumped 2-1/2 basis points to 1.15 percent by 12:00 GMT.

Minutes from the 1 - 2 November FOMC meeting indicated that participants generally agreed that based on the relatively limited information received since the September FOMC meeting that the case for increasing the target range for the federal funds rate had continued to strengthen. Minutes indicated that labour market conditions had improved further and considered the firming in inflation and inflation compensation to be positive developments, consistent with continued progress toward the Committee's 2 percent inflation objective.

However, a number of participants expressed the view that some modest slack remained in the labour market or noted that readings on inflation compensation and inflation expectations remained low, alongside some participants who suggested that current conditions did not point to an immediate need to tighten policy or that some further evidence of continued progress toward the Committee's objectives would provide greater support for policy firming.

Nevertheless, most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon as some participants noted that recent Committee communications were consistent with an increase in the target range for the federal funds rate in the near term or argued that to preserve credibility, such an increase should occur at the next meeting.

Kansas City Fed President George (a voter in 2016) commented that the effect of allowing the economy to overheat could produce short-term gains, but ultimately with longer-term costs. George added that consequently, she sees moving sooner, rather than later, as taking into account the long and variable lags with which monetary policy operates, and reduces the potential for 'go-stop' types of policies that create volatility, rather than subdue it.

Meanwhile, the S&P 500 Futures traded 4.50 points higher to 2,205 by 12:30 GMT. While at 12:00 GMT, the FxWirePro's Hourly Dollar Strength Index stood neutral at +31.01 (higher than +75 represents bullish trend).