U.S. Treasuries slump following better-than-expected jobs data; eyes on April trade balance

The U.S. Treasuries slumped Wednesday, as investors wait to watch the country’s trade balance data for the month of April, scheduled to be released today by 12:30GMT.

The yield on the benchmark 10-year Treasuries jumped nearly 3-1/2 basis points to 2.95 percent, the super-long 30-year bond yields surged nearly 3 basis points to 3.10 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 2.50 percent by 11:00GMT.

Today brings the final trade report for April as well as revised labour productivity and unit labour cost figures for Q1. With the surplus in service trade typically showing little month-to-month variation, and with the already reported goods deficit having shown little change from the previous month, the overall trade deficit is likely to be close to the deficit of USD49.0 billion in March.

The slight downward revision to Q1 GDP growth (to 2.2 percent q/q ann.) implies a modest downward adjustment to productivity. And with a slight upward adjustment to compensation per hour, unit labor cost growth could rise to 2.9 percent q/q ann., up from an initial estimate of 2.7 percent.

Meanwhile, the S&P 500 Futures rose 0.18 percent to 2,756.50 by 11:45GMT, while at 11:05GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -79.84 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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