U.S. Treasuries suffer ahead of August CPI data, 30-year auction

The U.S. Treasuries suffered Thursday ahead of the country’s consumer price index (CPI) for the month of August and a host of speeches by FOMC members, scheduled for later in the day. Also, the initial jobless claims and 30-year Note auction, due to today by 12:30GMT and 17:00GMT, respectively, will add further direction to the debt market.

The yield on the benchmark 10-year Treasuries rose 1-1/2 basis points to 2.979 percent, the super-long 30-year bond yields also surged nearly 1-1/2 basis points to 3.118 percent and the yield on the short-term 2-year traded 2 basis points higher at 2.769 percent by 11:20GMT.

In the US, today’s CPI report for August will be closely watched. A gain of 0.3 percent m/m in the headline index is expected, partly due to an increase in the energy component. That, however, might not be strong enough to prevent the annual headline rate from easing back 0.1ppt to 2.8 percent y/y, according to the latest report from Daiwa Capital Markets.

Having seen upwards pressure around the turn of the year, core CPI is expected to remain well-behaved, rounding to 0.2 percent m/m and 2.4 percent y/y. The monthly federal budget statement for August is also due for release along with the usual weekly jobless claims figures, the report added.

Meanwhile, the S&P 500 Futures traded 0.22 percent higher at 2,894.75 by 11:25GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -99.59 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex