U.S. Treasuries slump ahead of Fed interest rate decision, employment report

The U.S. Treasuries slumped Wednesday ahead of Federal Reserve’s first monetary policy meeting of 2017, scheduled to be held later today, followed by the Federal Open Market Committee (FOMC) statement and Fed Chair Janet Yellen’s speech.

The yield on the benchmark 10-year Treasury jumped nearly 2-1/2 basis points to 2.47 percent, the super-long 30-year bond yield also bounced nearly 3 basis points to 3.07 percent and the yield on short-term 2-year traded nearly 2 basis points higher at 1.22 percent by 12:10 GMT.

The Fed will take a pass at today’s FOMC meeting. The median policy participant forecasts just three 25 basis points rate hikes this year and incoming data offers no surprises to force one of those this month; however, March, remains in play.

The country’s real gross domestic product (GDP) grew by 1.9 percent y/y in the fourth quarter according to the advance estimate, falling short of the median consensus estimate of 2.2 percent.

Lastly, the Trump is also scheduled to unleash his budget proposals on February 6, which is widely expected to reveal the details which markets need to further propel Trump trades.

Meanwhile, the S&P 500 Futures rose 5.75 points or 0.25 percent to trade at 2,280.25 by 12:20GMT, while at 12:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bearish at -122.06 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex