U.S. Treasuries slightly gain ahead of Fed Chair Yellen’s speech

The U.S. Treasuries gained slightly Tuesday ahead of the Federal Reserve Chair Janet Yellen’s scheduled speech later in the day. Investors reassessed Trump’s ability to pass potentially reflationary bills, such as the promised tax cuts. As a result, US Treasury yields fell and the USD depreciated.

The yield on the benchmark 10-year Treasury fell nearly 1 basis point to 2.37 percent, the super-long 30-year bond skid 1/2 basis point to 2.97 percent and the yield on short-term 2-year note traded flat at 1.26 percent by 11:40GMT.

Financial markets registered a slight increase in risk aversion following the US Administration’s failure to pass the health care bill in Congress on 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 0.11 percent or 2.50 points to 2,335.75 by 11:40GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -12.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex