US Treasuries slump on higher risk appetite; FOMC statement eyed next week

The US Treasuries saw modest gains across much of the curve on Friday alongside a pullback in equities on Friday. Also, Jobless claims surprise decline to three-month low in the week ended July 16 discouraged investors from safe-haven buying.

The yield on the benchmark 10-year Treasury note rose nearly 2 basis points to 1.583 percent and the yield on short-term 2-year note also bounced 1-1/2 basis points to 0.707 percent by 11:30 GMT.

On Thursday, the US Initial jobless claims decreased -1k to 253k for the week ending 16 July, well below expectations for a 265k result, as compared to the unrevised 254k reading seen in the week prior. The 4-week average was reported at 257.8k, down from the unrevised 259.0k reading seen in the week prior.

Markets now look ahead to what stands to be a relatively quiet finish to the week, aided by an incredibly light data calendar, highlighted by preliminary Markit US manufacturing PMI data. On balance, Treasuries continue to search for direction in the wake of the UK Brexit decision.

Lastly, investors will remain keen to focus on the next week’s Fed policy decision and Fed Chair Yellen’s post-statement press conference, in an attempt to estimate the Fed's most likely step.

Meanwhile, the S&P 500 Futures up 2.5 points to 2,160.5 by 12:00 GMT.