U.S. Treasuries remain neutral ahead of December employment report, FOMC member Mester’s speech

The U.S. Treasuries neutralized on the last trading day of the week as investors await the country’s employment report for the month of December, scheduled to be released today at 13:30GMT. Also, investors are waiting to watch the ISM non-manufacturing PMI, due today by 15:00GMT and FOMC member Mester’s speech, which shall provide further direction to the debt market.

The yield on the benchmark 10-year Treasuries rose nearly 1 basis point to 2.46 percent, the super-long 30-year bond yields flat at 2.79 percent and the yield on the short-term 2-year hovered around 1.96 percent by 11:20GMT.

Following yesterday’s upside surprise to the ADP employment change figure (250k, up from 247k in November), forecasts for non-farm payrolls are likely to have been revised up, with a rise of 190k (down from 228k in November) having been the BBG consensus estimate prior to that release. In addition, the unemployment rate was expected to remain unchanged at 4.1 percent, while average hourly earnings growth was expected to inch up 0.1ppt to 0.3 percent m/m, leaving the annual rate at 2.5 percent y/y.

Other US releases due today include the latest ISM non-manufacturing survey, which is likely to show strong growth momentum in the sector heading to the end of last year. Consistent with the preliminary goods data released last week, the full November trade report is likely to show an increased deficit from the Q3 average suggesting that net exports might well subtract from GDP growth in Q4. And November factory orders will complete a busy day for US data.

Meanwhile, the S&P 500 Futures traded 0.28 percent higher at 2,731.25 by 11:25GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -22.84 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex