US Treasuries climb ahead of 30-year debt auction

The US Treasuries climbed on Thursday as investors were cautious ahead 30-year bond auction later in the session. In the early Asian session today, the 10-year US Treasury yield dipped below the 1.70 percent, down 3 basis points and fell to 1.67 percent for the first time since February.

The yield on the benchmark 10-year Treasury note fell near to 3 basis points to 1.678 percent mark and the yield on short-term 2-year Treasury note dipped 1 basis point to 0.775 percent by 12:35 GMT.

The US Initial jobless claims for the week ending 4 June decreased -4k to 264k, below expectations for a 270k result, as compared to revised 268k in the week prior, previous was 267k. The 4-week average was reported at 269.5k, from the revised 277.0k reading seen in the week prior, previous was 276.8k. Meanwhile, continuing claims for week ending 28 May decreased to 2.095 million, from unrevised 2.172 million reading seen prior. The insured unemployment rate decreased to 1.5 percent, down from 1.6 percent.

In the near-term we expect Treasuries will likely continue to hold around 1.6 percent mark, looking ahead to the FOMC statement next Wednesday before establishing a clearer direction. As mentioned previously, the degree to which markets have priced-out much of anything from the Fed will likely have a day of reckoning as the outlook policymakers use to make their decisions will be the ultimate trump card.

The US bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Federal Reserve's target. Today, crude oil prices jumped beyond $51 mark as strong China imports aided positive trading sentiment amid the ongoing supply outages in Nigeria and falling U.S. crude oil inventories. The International benchmark Brent futures fell 1.16 percent to $51.90 and West Texas Intermediate (WTI) dipped 1.17 percent to $50.63 by 12:35 GMT.

Looking ahead, Bank of Japan Governor Haruhiko Kuroda will make a decision on stimulus on June 16 and the Federal Open Market Committee (FOMC) gathering scheduled for June 14-15. The U.K. decision on whether to remain in the European Union on June 23 is also weighing on investors’ minds.

Meanwhile, S&P 500 Futures fell 7.75 points to 2,115.25 by 12:35 GMT