U.S. Treasuries jump ahead of October producer price index, FOMC member Quarles’ speech

The U.S. Treasuries jumped during late European session Friday ahead of the country’s producer price index for the month of October, scheduled to be released today by 13:30GMT. Also, FOMC member Quarles is due to deliver a speech today at 14:05GMT which shall provide further direction to the debt market.

The yield on the benchmark 10-year Treasuries slumped 3 basis points to 3.204 percent, the super-long 30-year bond yields plunged nearly 3 basis points to 3.397 percent and the yield on the short-term 2-year remained 2 basis points lower at 2.949 percent by 10:50GMT.

The Fed maintained the target range for the federal funds rate at 2.00-2.25 percent at yesterday’s monetary policy meeting, as was widely expected, and reiterated that “further gradual increases” will be consistent with its policy objectives.

In FX markets, supported by expectations for higher Fed interest rates ahead, the USD was firmer across the board. Elsewhere, US Treasury yields were lower today amid concerns over a more pronounced than currently expected slowdown in China, Eurobank Economic Analysis & Financial Markets Research reported.

Ahead of next week’s CPI data release, today we will receive October PPI figures. Higher fuel prices will probably push the energy component up, but food inflation is likely to remain soft. Core prices, meanwhile, will probably continue rising at a steady pace around 0.2 percent m/m, Daiwa Capital Markets reported.

In addition, the University of Michigan’s consumer sentiment index will be worth watching too. After a decline in October, a further modest decline in November is likely today, albeit the index still remains close to historically high levels, the report added.

Meanwhile, the S&P 500 Futures traded 0.44 percent lower at 2,804.50 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -76.12 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex