U.S. Treasuries suffer ahead of Jackson Hole Symposium, Fed Chair Powell’s speech

The U.S. Treasuries slumped Friday as all eyes today will be on the Kansas City Fed’s annual Jackson Hole symposium, as Fed Chair Powell is scheduled to deliver his speech on ‘monetary policy in a changing economy’.

The yield on the benchmark 10-year Treasuries jumped 1-1/2 basis points to 2.83 percent, the super-long 30-year bond yields also surged 1-1/2 basis points to 2.98 percent and the yield on the short-term 2-year too traded nearly 1-1/2 basis points higher at 2.62 percent by 11:50GMT.

While it would now seemingly take a sudden major negative shock to prevent a rate hike at the FOMC’s September meeting, investors will obviously be watching for clues as to what might come thereafter, particularly in light of the recent adverse developments among certain emerging markets (not least in Turkey) and the significant strengthening of the dollar since April, Daiwa Capital Markets reported today.

Data-wise in the US, today brings durable goods orders figures for July, alongside the latest Chicago and Dallas Fed’s activity indices. The solid recent performance of the manufacturing sector should be consistent with firm durable goods orders in several sectors, with a consensus expectation for orders ex transportation of 0.5 percent m/m, bang in line with the average of the past six months. However, there is also likely to be payback for June’s strong defense aircraft bookings, and so the consensus for the overall change in orders is for a decline of 1.0 percent m/m, the report added.

Meanwhile, the S&P 500 Futures traded 0.1 percent higher at 2,864.00 by 11:55GMT, and at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -60.65 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex