U.S. Treasuries slump ahead of January ISM manufacturing PMI

The U.S. Treasuries slumped during Monday’s afternoon session ahead of the country’s ISM manufacturing PMI for the month of January, scheduled to be released today by 15:00GMT, amid an otherwise muted trading session that witnessed data of little economic significance.

The yield on the benchmark 10-year Treasury yield surged nearly 2 basis points to 1.536 percent, the super-long 30-year bond yield surged 1-1/2 basis points to 2.025 percent and the yield on the short-term 2-year remained 1 basis point higher at 1.339 percent by 12:15GMT.

It will be a busy week for US top-tier economic releases. This afternoon kicks off with January’s manufacturing ISM, which, despite some reversal of the sharp drop seen in December, is expected to remain in contractionary territory. In contrast, the final Markit manufacturing PMI is expected to confirm a further decline in January, albeit to a level still consistent with expansion. Today will also bring construction spending figures for December, followed by revised durable goods and trade data for the same month tomorrow and Wednesday respectively. The non-manufacturing ISM and final services PMI for January are also due on Wednesday, both of which are expected to remain comfortably in expansionary territory, Daiwa Capital Markets reported.

That day will also see the release of the latest ADP employment report, while Challenger job cuts and weekly jobless claims figures are due Thursday. Of course, of greater significance will be Friday’s non-farm payrolls report, which is expected to show a slightly stronger increase in January (160k) than December, albeit a touch below the average for the past year as whole. The unemployment rate will likely move sideways at 3.5 percent, while average weekly earnings growth is expected to be little changed at 2.9 percent y/y, the report added.

Meanwhile, the S&P 500 Futures remained tad 0.40 percent higher at 3,236.88 by 12:20GMT.