U.S. Treasury yields continue to suffer on burgeoning tensions over trade tariffs; eyes on FOMC speeches

The U.S. Treasury yields continued to suffer during Monday’s afternoon session, as tensions over trade tariffs with China remained on the upfront, while there had been hopes of a more conciliatory resolution, after the US’ action to raise tariffs from 10-25 percent on USD200 billion worth of Chinese imports.

The yield on the benchmark 10-year Treasury yield plunged 3 basis points to 2.425 percent, the super-long 30-year bond yields edged 1-1/2 basis points lower to 2.858 percent and the yield on the short-term 2-year also slumped 3-1/2 basis points to 2.217 percent by 10:30GMT.

Wednesday will bring the likely data highlights of the week, with industrial production and retail sales figures for April due. Following a surprise drop in March, IP should post a modest increase at the start of Q2. In contrast, after a surprisingly strong end to the first quarter, underlying retail sales growth is expected to be much softer last month, Daiwa Capital Markets reported.

That day will also bring the Empire Manufacturing index for May, which follows tomorrow’s release of April’s NFIB small business survey and precedes May’s Philly Fed index (Thursday) and the Conference Board’s leading index for April (Friday). Friday also brings the preliminary University of Michigan’s consumer sentiment survey.

And housing market indicators due include May’s NAHB housing index on Wednesday and April’s housing starts figures on Thursday. There are no UST bond auctions due this week, the report added.

Meanwhile, the S&P 500 Futures traded -1.18 percent lower at 2,852.88 by 10:35GMT, while at 10:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -88.31 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex