U.S. Government bonds rebound on OPEC output cut worries; higher Q3 GDP to revive risk sentiments

The U.S. Treasuries pushed higher across the curve on Monday as crude oil prices tumble on output cut worries. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.31 percent, the yield on long-term 30-year Treasury dipped 3-1/2 basis points to 2.98 percent and the yield on short-term 2-year note slid 1-1/2 basis points to 1.12 percent by 12:00 GMT.

Crude oil prices fell after Saudi Arabia cancels its meeting with non-OPEC members, including Russia. The International benchmark Brent futures fell 0.68 percent to $47.90 and West Texas Intermediate (WTI) dipped 1.02 percent to $45.59 by 12:00 GMT.

Markets now look ahead to a greater flow of data this week, highlighted by the November employment report on Friday, preliminary third-quarter GDP, personal income/spending, consumer confidence, the ADP employment estimate, ISM manufacturing and vehicle sales releases.

Moreover, 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.

Meanwhile, the S&P 500 Futures traded 7.25 points lower to 2,204 by 12:10 GMT. While at 12:00 GMT, the FxWirePro's Hourly Dollar Strength Index stood neutral at +47.19 (higher than +75 represents bullish trend).