U.S. Treasuries flat in muted trading; all eyes on FOMC policy decision

The U.S. Treasuries flat Tuesday in muted trading session as investors remained sidelined in any major trading activity ahead of Wednesday’s FOMC monetary policy decision.

The yield on the benchmark 10-year Treasury rose nearly 1 basis point to 2.37 percent, the super-long 30-year bond yields also climbed closely 1 basis point to 2.88 percent and the yield on short-term 2-year note traded flat at 1.58 percent by 10:40GMT.

While politics and the Mueller inquiry seems likely to dominate attention in the US, today will bring noteworthy data, relevant for the  Fed’s forthcoming decision-making, in the shape of the Q3 employment cost index. Our US chief economist Mike Moran expects this to come in at 0.6 percent q/q, in line with the average of the past four quarters.

In addition, the Conference Board’s consumer confidence survey for October is expected to post an increase in the headline index to move closer to the multi-year high reached in March. The October Chicago PMI and August S&P CoreLogic Case-Shiller home price indices are also due.

Looking at the rest of the coming week’s US data diary, notable releases include the Q3 Employment Cost Index and the October Conference Board consumer survey and Chicago PMI today; the October manufacturing ISM, ADP employment report and September construction spending (Wednesday); October auto sales and Q3 labour productivity (Thursday); and the October non-manufacturing ISM and full September trade report (Friday).

Meanwhile, the S&P 500 Futures traded 0.16 percent higher at 2,572.25 by 10:35GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bullish at 82.01 (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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