U.S. Treasuries rally on Fed Chair Powell’s patient outlook on interest rates; December CPI data in focus

The U.S. Treasuries rallied during late afternoon session Friday ahead of the country’s consumer price inflation data for the month of December, scheduled to be released today by 13:30GMT.

Also FOMC Chair Jerome Powell’s speech, delivered late yesterday, focussed away from tightening in the coming months and that he is 'very worried' about the state of mounting U.S. debt.

The yield on the benchmark 10-year Treasuries slumped 2 basis points to 2.711 percent, the super-long 30-year bond yields edged nearly 1 basis point lower to 3.043 percent and the yield on the short-term 2-year also suffered 2 basis points to 2.545 percent by 11:40GMT.

The United States’ CPI is expected to have declined 0.1 percent m/m to leave the annual rate down 0.3ppt at 1.9 percent y/y. However, that is likely due to a drop in fuel prices, so that core CPI is expected to rise 0.2 percent for the third successive month to leave the annual core rate unchanged at 2.2 percent y/y for the fourth month out of the past five, Daiwa Capital Markets reported.

The release of the Treasury’s monthly budget statement, however, has been postponed due to the government shutdown.    

Meanwhile, the S&P 500 Futures slipped 0.15 percent to 2,590.38 by 11:45GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bearish at -118.438 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex