U.S. Treasuries spurge on safe-haven demand following massive sell-off in Turkish Lira

The U.S. Treasuries jumped during North American session Wednesday as investors crowded into safe-haven assets, following a massive sell-off in the Turkish Lira. Also, the 5-year note auction, scheduled to be held today by 17:00GMT and the 7-year auction on May 24, besides, tonight’s Federal Open Market Committee’s (FOMC) meeting minutes, due at 18:00GMT will be watched for any further direction in the debt market.

The yield on the benchmark 10-year Treasuries slumped 5 basis points to 3.01 percent, the super-long 30-year bond yields plunged 4-1/2 basis points to 3.16 percent and the yield on the short-term 2-year traded nearly 3 basis points lower at 2.56 percent by 15:10GMT.

The Turkish lira dropped more than 5 percent before recovering some ground, the latest sell-off that reflects growing investor alarm over the direction of monetary policy under President Tayyip Erdogan.

In addition, the country sold $33 billion in 2-year notes to fair demand on Tuesday, though dealers took 45.37 percent of the sale, their largest share since December 2016. The government will also sell $30 billion in 7-year notes on Thursday, in addition to $16 billion in 2-year floating rate notes later today.

Lastly, the Federal Reserve’s minutes for its May meeting on Wednesday will also be evaluated for indications of how many rate hikes are likely this year.    

Meanwhile, the S&P 500 Futures slipped 0.50 percent to 2,712.25 by 15:15GMT, while at 15:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 25.34 (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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