U.S. Government Bonds Climb As Investors Eye Crude Oil Prices, FOMC Minutes

U.S. Government Bonds Climb As Investors Eye Crude Oil Prices, FOMC Minutes

The U.S. sovereign bonds rallied on Monday as investors are closely monitoring a spike in the prices of crude oil and waiting to read any hints from Federal Reserve members’ comments for future policy actions. The 10-year bonds yield which is inversely propositional to prices of bonds dipped 1.34 pct to 1.76 pct and 3-year bonds yield fell 3.03 pct to 0.86 pct at 12:50 PM GST.

There was a better-than-expected nonfarm payrolls number on Friday. The non-farm payrolls increased 215k, versus the revised 245k result that occurred in February (previous +242k), above market expectations for a 205k increase. This comes alongside an increase in the unemployment rate of 5.0% up from eight year low of 4.9%, above expectations for a 4.9% result. Meanwhile, average hourly earnings increased +0.3% m/m, versus the unrevised -0.1% m/m reading seen in February.

Alongside the stronger than expected headline result, this clearly supports the view that the economy continues to show gradual improvement as we move further into 2016, though is not likely to trigger a move to raise rates by the FOMC at the April meeting.

On Friday, the 2-Year yield found renewed upward pressure, breaking back above the 0.75 pct-mark, contrasted by a decrease seen in the 10-Year yield, pushing further below 1.80 pct.

Moreover, the market will primarily focus on the upcoming FOMC meeting minutes on Wednesday. Although, we do not anticipate any market movers from the coming minutes and except the same hint for increase in policy rates at the June FOMC meeting.

Lastly, Boston Fed President Eric Rosengren is due to speak at 10:15 a.m. ET on Monday, while Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan are both due to speak after the closing bell.

The material has been provided by InstaForex Company - www.instaforex.com