U.S. Treasuries slump as investors await 7-year auction, Q1 growth

The U.S. Treasuries slumped ahead of the 7-year auction, due to be held later in the day. Also, the country’s Q1 GDP, initial jobless claims and FOMC member Bullard’s speech, due on June 29, will provide further direction to the debt market.

The yield on the benchmark 10-year Treasury, jumped 4-1/2 basis points to 2.24 percent, the super-long 30-year bond yields surged 5 basis points to 2.79 percent and the yield on short-term 2-year note traded nearly 1 basis point higher at 1.37 percent by 11:10GMT.

Global sovereign bond yields moved sharply higher and the EUR firmed after comments by the ECB President at the fourth annual ECB Forum on Central Banking in Portugal were perceived by market participants as a signal that the Central Bank is likely to start tapering its QE programme earlier than expected.

Also, the USD was weaker across the board following news that the Republican Senate Majority Leader decided to push off a vote on a healthcare bill to replace Obamacare until after Congress returns from the July 4th recess.

In addition, the downward revision of the GDP growth forecast by the IMF, (see) coupled with a new episode of technological sector volatility dragged down main US assets. Nonetheless, investors will be closely watching Fed Chair Janet Yellen’s speech, which may offer new hints on the timing of the Fed’s interest rate hikes and balance sheet reduction

Meanwhile, the S&P 500 Futures traded 0.08 percent higher at 2,422.00 by 11:200GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -61.76 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex