The US Treasuries saw further gains across the curve on Monday, following downward pressure in equities, majorly stemming from Brexit concerns. Also, investors were cautious ahead of Federal Open Market Committee (FOMC) gathering scheduled for June 14-15.
The yield on the benchmark 10-year Treasury note fell 1 basis points to 1.628 percent and the yield on short-term 2-year Treasury note dipped 1-1/2 basis point to 0.722 percent by 11:15 GMT.
On Friday, the 2-year yield saw downward pressure on the session, pushing below 0.75 percent, alongside a greater decrease in the 10-year yield, marching lower below 1.65 percent mark.
In the global debt market, the 10-year JGB hit a fresh all-time low of minus 0.158 percent. The German 10-year bund yield hovers above zero at 0.016 percent and the UK 10-year gilt yield slid to all-time low of 1.20 pct.
The recent polls showed the outcome of the referendum is too close to call, raising the possibility that Britain might leave the EU after 43 years of membership in the bloc. According to a new Brexit poll by ORB published by the Independent on Saturday, the Leave camp has suddenly surged ahead with a lead of 55 percent, as compared to 45 percent for Remain.
On the other hand, the United Kingdom bookmaker, Betfair has reduced European Union referendum Remain probability to 70 percent compared to previous implied volatility of 78 percent, after ORB poll.
On Friday, the preliminary University of Michigan consumer sentiment estimate for June decreased to 94.3, versus the final May reading of 94.7. This comes in just above expectations for a 94.3 headline reading. Despite the decrease seen in the headline, survey readings show the consumer in an improved situation (as seen via the economic conditions: 111.7, from 109.9), offset by less support from expectations (83.2, from 84.9). Alongside the weaker headline result, inflation expectations saw mixed pressure with no change in the 1-year measure (2.4 percent), alongside a decreased reading seen on the 5-year time horizon, 2.3 percent, down from 2.5 percent.
Markets now look ahead to a greater flow of data this week, highlighted by PPI, CPI, Empire manufacturing, Philadelphia manufacturing and housing starts/building permits releases. However, the key focus for the week will be the June FOMC statement on Wednesday, accompanied by updated economic projections and a post-statement press conference from Fed Chair Yellen.
Meanwhile, S&P 500 Futures fell 7 points to 2,080.25 by 12:50 GMT.
The material has been provided by InstaForex Company – www.instaforex.com