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U.S. Treasuries suffer in silent trading ahead of FOMC’s monetary policy decision

The U.S. Treasuries suffered during Monday’s afternoon session, amid a muted trading session that witnessed data of little economic significance ahead of the Federal Reserve’s monetary policy meeting on June 19 at 18:00GMT.

With respect to economic data, this week will witness the release of housing market, including the NAHB index for June (today), housing starts for May (tomorrow) and existing home sales for May (Friday).

The yield on the benchmark 10-year Treasury yield jumped 2 basis points to 2.115 percent, the super-long 30-year bond yields also surged 2 basis points to 2.613 percent and the yield on the short-term 2-year traded nearly 3-1/2 basis points higher at 1.883 percent by 11:35GMT.

While the Fed Funds Rate target range looks set to be left unchanged at 2.25-2.50 percent, the updated forecasts, dot-plots, statement and press conference will be watched for clues as to the likelihood of a near-term rate cut. The status of previous language stating that the FOMC intends to be “patient as it determines what future adjustments…may be appropriate” will be key, Daiwa Capital Markets reported.

Further, as noted by Daiwa America Chief Economist Mike Moran, "if officials retain “patient” to describe their expected pace of action, we would view this as a strong effort to dissuade market participants of the view that the Fed will be easing policy aggressively."

Meanwhile, the S&P 500 Futures traded tad 0.09 percent higher at 2,897.38 by 11:40GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bullish at 126.70 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

By Debarati Bir
  • Market Data
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