U.S. Treasuries gain ahead of January Philly Fed manufacturing index, producer price index

The U.S. Treasuries gained Thursday ahead of the country’s Philadelphia Fed Manufacturing Index for the month of February and the producer price index (PP) for the same period, besides the 30-year auction, all scheduled for today at 13:30GMT and 18:00GMT respectively.

The yield on the benchmark 10-year Treasuries rose a little over 1 basis point to 2.92 percent, the super-long 30-year bond yields hovered around 3.17 percent and the yield on the short-term 2-year traded 2 basis points higher at 2.19 percent by 10:50GMT.

Yesterday’s substantial upside surprise in the US CPI for January saw 10-year Treasury yields rise to a fresh four-year high of 2.91 percent in the overnight session and edged higher to 2.93 percent this morning. However, a weaker US dollar and a softer-than-expected US retail sales report – the latter perhaps working against a material step up in Fed hawkishness – seemed to provide comfort to equity investors, with the S&P500 having closed up 1.3 percent

Following yesterday’s CPI release, the debate about the extent of current inflationary pressures will continue today with January’s PPI figures due for release. In addition, January industrial production figures are expected to show that output rose only modestly at the start of the year after the robust 0.9 percent m/m increase in December.

Among other new economic data, the Empire State Manufacturing and Philadelphia Fed business conditions surveys.

Meanwhile, the S&P 500 Futures rose 0.69 percent to 2,715.50 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -76.74 (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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