U.S. Treasuries continue downtrend ahead of May producer price index, short-term 3-year auction

The U.S. Treasuries continued downtrend during Tuesday’s afternoon session, ahead of the country’s producer price index (PPI) data for the month of May, scheduled to be released today by 12:30GMT, amid an otherwise silent trading day that witnessed data of little economic significance.

However, the short-term 3-year auction, also due later today, might provide some direction to bond prices.

The yield on the benchmark 10-year Treasury yield surged 3-1/2 basis points to 2.176 percent, the super-long 30-year bond yields also jumped 3-1/2 basis points to 2.655 percent and the yield on the short-term 2-year traded 3 basis points higher at 1.930 percent by 11:20GMT.

Today’s release of the NFIB’s small business optimism survey is expected to see the headline indicator fall back towards the bottom of the recent range. The latest PPI figures for May will also be watched ahead of Wednesday’s CPI release. While gasoline prices rose last month, the increase was within the seasonal norm, Daiwa Capital Markets reported.

And with prices of other goods seemingly well contained, producer prices likely rose 0.2 percent m/m, to leave the annual rate moderating 0.2ppt to 2.0 percent y/y, the report added.

Meanwhile, the S&P 500 Futures traded tad 0.45 percent higher at 2,902.12 by 11:25GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 4.68 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex