U.S. Treasuries plunge on rising expectations of Fed rate hikes; 10-year yields approach 3 pct mark

The U.S. 10-year Treasuries plunged Thursday, on rising expectations of three gradual interest rate hikes by the Federal Reserve. Also, the yields on the 1-year government bonds are seen to approach the 3 percent mark, in line with our previous forecast, where we maintained that yields will likely breach the 3 percent barrier in 2017.

Also, markets now look forward to a host of speeches by the President-elect Donald Trump and Federal Open Market Committee (FOMC) member John C. Williams. Further, the 10-year bond auction scheduled for today will also remain major market movers.

The yield on the benchmark 10-year Treasury jumped nearly 5 basis points to 2.44 percent, the super-long 30-year bond yield also bounced nearly 3 basis points to 3.01 percent and the yield on short-term 2-year note moved nearly 3-1/2 basis points to 1.22 percent by 12:15 GMT.

Lastly, investors will remain focussed on a wide array of speeches by the Fed Chair Janet Yellen and FOMC member Williams on the Inauguration Day on January 20. However, President-elect trump’s speech will prominently dominate markets.

Meanwhile, the S&P 500 Futures traded 1.75 points or 0.08 percent lower at 2,264.75 by 12:25GMT, while at 12:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -72.79 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex