U.S. Treasuries climb ahead of initial jobless claims, Fed Chair Powell’s testimony

The U.S. Treasuries climbed Thursday ahead of the country’s initial jobless claims and core personal consumption expenditure (PCE) indicator, besides, Federal Reserve Chair Jerome Powell’s testimony, the ISM manufacturing PMI and FOMC member Dudley’s speech, all scheduled for later today.

The yield on the benchmark 10-year Treasuries slumped 3 basis points to 2.84 percent, the super-long 30-year bond yields fell 2 basis points to 3.11 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 2.25 percent by 10:40GMT.

Today the January US personal income and spending report, which is expected to show a modest increase in nominal spending weighed by softer car sales and impacted by harsh winter weather too. In terms of prices, the headline PCE deflator, to be released with that report, is expected to rise 0.4 percent m/m, the most in four months, to leave the annual rate at 1.7 percent y/y.

And the core PCE deflator, which is the Fed’s preferred inflation measure, is forecast to rise by 0.3 percent m/m, which would be the most in a year or more and could take the annual rate up to an eight-month high of 1.6 percent y/y.

In addition, the February ISM manufacturing survey is due along with data for vehicle sales for the same month, January construction spending, and the usual weekly claims. Most importantly, Fed Chair Powell will repeat his monetary policy testimony before the Senate Banking Committee, with the key question being whether he’ll seek to reinforce the (perceived) hawkishness of Tuesday’s remarks, or – if he judges that the market response has been overegged – try to row back a touch, Daiwa Capital Markets reported.

Meanwhile, the S&P 500 Futures fell 0.13 percent to 2,711.75 by 10:45GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bullish at 139.97 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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