U.S. Treasuries flat in muted session; Trump’s comments over Fed drag yields lower overnight

The U.S. Treasury yields remained flat during late European session Friday, after moving lower overnight, following President Donald Trump’s pessimistic comments over the Federal Reserve’s rate hikes, besides threatening markets with a worse action on Russia if Putin fails to maintain relationship with the former.

The yield on the benchmark 10-year Treasuries steadied at 2.84 percent, the super-long 30-year bond yields flat at 3.00 percent and the yield on the short-term 2-year hovered around 2.59 percent by 11:00GMT.

Yesterday President Trump told viewers of CNBC that he was "not thrilled" by the Fed’s ongoing rate hikes, which according to Trump were undermining all the good work he was doing for the US economy. Trump added "I am not happy about it. But at the same time I’m letting them do what they feel is best".

Despite the caveat, and the recognition that the President’s leverage over the Fed is now limited having made (credible) appointments to the board of governors, investors responded negatively to the rather un-presidential intervention with a decline in financial stocks leading the S&P500 to an admittedly modest 0.4 percent loss on the day, while US Treasury yields also moved slightly lower (having earlier yesterday moved close to 2.90 percent for the first time in more than three weeks), and the dollar fell back in trade-weighted terms too.         

Meanwhile, the S&P 500 Futures remained 0.20 percent lower at 2,799.50 by 11:10GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bullish at 55.49 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex