U.S. Treasuries gain modestly ahead of FOMC members’ speech, Q4 GDP

The U.S. Treasuries modestly gained Wednesday ahead of the Federal Open Market Committee (FOMC) members Rosengren and Williams’ speech, scheduled to be held later in the day.

The yield on the benchmark 10-year Treasury fell nearly 1 basis point to 2.40 percent, the super-long 30-year bond hovered around 3.01 percent and the yield on short-term 2-year note slumped nearly 1-1/2 basis points to 1.28 percent by 11:30GMT.

Financial markets registered a slight increase in risk aversion following the US Administration’s failure to pass the health care bill in Congress last Friday. Further, equities extended their declines, especially the banking sector, as expectations of reflationary policy faltered. The movement in US assets dragged down global stocks and pushed up sovereign bond prices.

Reacting to today’s modest improvement in risk sentiment, US Treasuries edged lower but their losses were limited. Later in the day, Fed Chair Yellen will be the keynote speaker at the NCRC Annual Conference held in Washington.

Meanwhile, the S&P 500 Futures fell 0.03 percent or 0.75 points to 2,350.75 by 11:30GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at 47.19 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex