U.S. Treasuries trade flat ahead of ISM manufacturing PMI data

The United States treasuries traded flat Monday as investors’ awaited ISM manufacturing PMI data in a salient trading day. The yields on the 10-year bond rose more than 15 percent so far this month on expectations of the Federal Reserve interest rate hike in December and three more next year.

The yield on the benchmark 10-year Treasury hovered around 2.32 percent, the super-long 30-year bond yields remained steady at 2.89 percent and the yield on short-term 2-year note traded flat at 1.48 percent by 13:20GMT.

The ISM factory activity for September is expected to released at 1400 GMT, it is expected to come at 58, down from 58.8 in August. US ISM Non-Manufacturing PMI is usually very market moving and considering that over 70% of U.S. labor force is services related, today’s release will probably have more of a say so on Friday’s NFP than the ADP release, or at least we should see market sentiment shift if we were to get a surprise today.

The key is to pay close attention to the Employment component, if we see a strong increase compared to the prior reading and its above 50, then the market should react positively to the USD.

Meanwhile, the S&P 500 Futures traded 0.9 percent lower at 2,518.25 by 13:20GMT, while at 13:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 70.24 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend).

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