U.S. Treasuries gain ahead of Fed meeting minutes

The U.S. Treasuries gained as investors await to read the Federal Reserve’s minutes of the last policy meeting, scheduled to be released later in the day. Also, today’s 5-year note auction will be closely eyed by market participants for detailed direction in the debt market.

The yield on the benchmark 10-year Treasury, slipped nearly 1 basis point to 2.27 percent, the super-long 30-year bond yields fell 1 basis point to 2.93 percent and the yield on short-term 2-year note traded 1/2 basis point lower at 1.32 percent by 11:40GMT.

The Federal Reserve will release the May meeting minutes on Wednesday. Investors will be seeking further details regarding the possibility of an interest rate hike in June meeting and the Fed’s plans to start reducing the size of its balance sheet.

Further, the political tensions involving the FBI investigations have not fully dampened the enthusiasm regarding Donald Trump’s massive spending plans and major tax reforms but brought investors to re-price them further in time.

Despite the turbulent political environment, the Fed is believed to be navigating with care through the storm triggered by Trump’s presidency. At this point in time, there is no fundamental reason to hold the Fed members back from a June interest rate hike. Lastly, latest comments from the Fed members hint at no particular resistance to a June rate hike and this is what investors want to read through the Wednesday’s minutes.

Meanwhile, the S&P 500 Futures traded 0.75 percent down at 2,397.25 by 11:10GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -16.26 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex