U.S. Treasuries tad higher in muted trading session ahead of Fed’ last policy meeting of 2018

The U.S. Treasuries remained tad higher during late afternoon session Monday amid a muted trading session that witnessed data of little economic significance. However, all eyes are on the Fed’s announcements on Wednesday. The FOMC seems highly likely to hike the fed funds target rate by a further 25bps to 2.25-2.50 percent.

The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.882 percent, the super-long 30-year bond yields remained tad lower at 3.140 percent and the yield on the short-term 2-year remained 1/2 basis point lower at 2.727 percent. by 11:10GMT.

But, not least given Jerome Powell’s recent commentary and the minutes of the November meeting, the FOMC is also expected to amend its statement to suggest strongly that future rate hikes are data-dependent rather than firmly baked in.

And it will also likely publish some more dovish dot-plots than the previous set issued in September, with the dots showing expectations for rate hikes next year likely to be clustered around the one-to-three range, Daiwa Capital Markets reported.

Before the Fed, a busy US data diary begins today with the December releases of the New York Fed’s manufacturing survey and NAHB housing index. November housing starts and building permits data are due tomorrow, followed by the existing home sales report the following day.

After the Fed, on Thursday, the Philadelphia Fed will publish its manufacturing survey for December, while the Conference Board’s leading indicator for November will also be released.

On Friday markets will receive the ‘final’ estimate of GDP growth for Q3. More importantly, developments in activity during Q4 will become clearer with the release of the personal income and spending and advance durable goods orders reports for November, the report added.

Meanwhile, the S&P 500 Futures remained 0.04 percent higher at 2,606.62 by 11:20GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -12.05 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex