U.S. Treasuries collapse ahead of 10-year, 30-year auctions; hopes of rise in August PPI push yields higher

The U.S. Treasuries nose-dived Tuesday as investors wait to watch the country’s 10-year auction, scheduled to be held today by 17:00GMT, besides, the JOLTs job openings report, due by 14:00GMT. Further, the 30-year bond auction on September 13 by 17:00GMT will provide further direction to the bond market.

Also, the country’s producer price-led inflation index (PPI) for the month of August, scheduled to be released on September 13 by 12:30GMT, is expected to rebound 0.3 percent m/m, from a low of -0.1 percent m/m, which will further weigh on bond prices.

The yield on the benchmark 10-year Treasury jumped nearly 3-1/2 basis points to 2.16 percent, the super-long 30-year bond yields climbed 2-1/2 basis points to 2.76 percent and the yield on short-term 2-year note traded nearly 1 basis point higher at 1.33 percent by 10:50GMT.

Perceived risk assets retained a positive tone in early trade on Tuesday as fears over another missile launch from North Korea over the weekend proved unfounded while Hurricane Irma appeared to have caused less damage than some had expected.

Against this background, European bourses opened higher taking their lead from Wall Street’s positive performance overnight while, in FX markets, the USD continued to move higher. On the flip side, safe haven assets continued to lose their allure.

Meanwhile, the S&P 500 Futures traded 0.15 percent higher at 2,489.50 by 10:55GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 35.87 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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