U.S. 2-year Treasury yield overtakes Tuesday’s high following hawkish comments from Fed Chair Powell

The U.S. 2-year Treasury yield on Wednesday, broke yesterday’s high of 2.619 percent, albeit remaining flat at the time of writing, reaching a day’s high of 2.624 percent. In the overnight session, bond yields experienced a push-up after Federal Reserve Chair Jerome Powell delivered a hawkish testimony to the Congress, implying the chances of gradual interest rate hikes this year. Markets will also be focussing on Powell’s second consecutive testimony, later today, in front of the Senate for gauging market direction clearly.

The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.85 percent, the super-long 30-year bond yields traded tad lower at 2.96 percent and the yield on the short-term 2-year too remained 1/2 basis point lower at 2.61 percent by 11:15GMT.

The main event in the US today will arguably be Fed Chairman Jerome Powell’s semi-annual testimony before the Senate Banking Committee. The second leg before the House Financial Services Committee will follow when the Fed’s Beige Book will also be released. The Q2 corporate reporting season will also begin to heat up with 7 DJI and 59 S&P500 companies scheduled to state their earnings.

Further attention will turn to the housing market with the housing starts and permits report for June. The Philadelphia Fed’s manufacturing survey for July and the Conference Board’s leading index for June are released on Thursday. In the bond market, the U.S. Treasury will auction 10-year TIPS on Thursday.         

Meanwhile, the S&P 500 Futures remained nearly flat at 2,810.75 by 11:30GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bullish at 83.87 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex