US Treasuries Flat in Thin Trade

US Treasuries Flat in Thin Trade

9 May 2016, 16:03
Roberto Jacobs

US Treasuries Flat in Thin Trade

The U.S. Treasuries were trading nearly flat on Monday amid subdued trade with investors seeking riskier assets. The yield on the benchmark 10-year Treasury note which moves inversely to its price stood unchanged at 1.777 pct and the yield on the 2-year Treasury bond ticked down 1bps to 0.722 pct by 1245 GMT.

On Friday, the April U.S. labour department employment situation report revealed overall 160k increase in non-farm payrolls, well below market expectations for a 200k increase, as compared to revised 208k result that occurred in March, previous was 215k. This comes alongside no change in the unemployment rate of 5.0 pct, above expectations for a 4.9 pct result. Moreover, average hourly earnings increased 0.3 pct m/m, from revised 0.2 pct m/m reading seen in March previous was 0.3 pct m/m.

Today, Chicago Fed President Evans said that the U.S economic fundamentals are strong and he sees growth about 2.5 pct for the rest of the year. Said would like to have more confidence on the inflation outlook and the Fed's 'wait and see' stance is appropriate. On the other hand, New York Fed President Dudley said that 2 policy rate hikes in 2016 remain a 'reasonable expectation', although small changes in the outlook could lead to increases being delayed for months at a time.

Moreover, the markets now look ahead to a lighter flow of data this week, highlighted by retail sales, producer prices, business inventories and University of Michigan consumer sentiment releases on Friday. Additionally, markets receive 3-Year Note, 10-Year Note and 30-Year Bond auctions on Tuesday, Wednesday and Thursday, respectively.

Meanwhile, S&P 500 Futures rose 0.09 pts to 2,054.5 by 1245 GMT.

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