U.S. Treasuries climb despite expectations of rise in Q4 2017 GDP; eyes on 7-year auction

The U.S. Treasuries climbed Wednesday even as market participants are expecting a rise in the country’s Q4 gross domestic product (GDP), scheduled to be released today by 12:30GMT. Also, the 7-year note auction, coupled with FOMC member Bostic’s speech will add further direction to the debt market.

The yield on the benchmark 10-year Treasuries slumped 2-1/2 basis points to 2.76 percent, the super-long 30-year bond yields slid nearly 1-1/2 basis points to 3.01 percent and the yield on the short-term 2-year too traded 1-1/2 basis points lower at 2.26 percent by 11:40GMT.

Worries over a trade war between the world’s two largest economies prevail. Chinese reports suggested that China will soon announce a list of retaliatory tariffs on US exports to China following the US administration’s decision to impose tariffs on steel and aluminum imports and to target China by announcing earlier this month plans for tariffs of up to $60bn on Chinese imports.

European equity markets opened in the red today while reduced risk appetite favored the safe haven appeal of core government bonds. Looking at today’s calendar focus is on the 3rd estimate for US Q4 GDP which is expected to be revised upwards to an annual rate of 2.7 percent from 2.5 percent previously.

Meanwhile, the S&P 500 Futures rose 0.23 percent to 2,621.75 by 11:45GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bullish at 85.02 (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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