U.S. Treasuries slump ahead of August PCE, FOMC member Harker’s speech

The U.S. Treasuries slumped during Friday’s afternoon session ahead of the country’s personal consumption expenditure (PCE), a valuable index for the calculation of consumer price inflation (CPI) for the month of August, scheduled to be released today by 12:30GMT, besides, a speech from Federal Open Market Committee (FOMC) member Harker, due to be delivered today by 16:00GMT.

The yield on the benchmark 10-year Treasury yield jumped 3-1/2 basis points to 1.720 percent, the super-long 30-year bond yield surged nearly 4 basis points to 2.166 percent and the yield on the short-term 2-year traded 2 basis points higher at 1.676 percent by 12:00GMT.

USTs are little changed from this time yesterday (10Y yields still close to 1.70 percent) ahead of today’s US personal spending report which will provide an update on the Fed’s preferred inflation measure. JGBs largely shrugged off the Tokyo CPI report, with 10-year yields trading within yesterday’s range and 2-year yields up about 1bp to -0.33 percent, their highest level in three days, Daiwa Capital Markets reported.

This afternoon will bring the release of preliminary durable goods orders data for August, along with personal income and spending numbers for the same month, including the Fed’s preferred inflation measure, the core PCE deflator. On an annual basis, this is expected to rise 0.2ppt to 1.8 percent y/y, which would be the highest since December, the report added.

Meanwhile, the S&P 500 Futures remained nearly steady at 2,989.12 by 12:05GMT.