Treasury Yields Fall as Geopolitical Concerns Rise

Treasury Yields Fall as Geopolitical Concerns Rise

U.S. government paper prices advanced, driving down Treasury yields after seismic activity detected in North Korea raised geopolitical concerns. An auction of 30-year bonds, in the meantime, attracted solid demand from investors and put pressure on the long-dated yields.

The 10-year benchmark Treasury yield declined 2 basis points to 2.323 percent. Meanwhile, the two-year Treasury note yield was flat at 1.517 percent, hovering near a nine-year high hit in the previous session. The long bond or the 30-year bond yield fell 2 basis points to 2.854 percent.

The U.S. Geological Survey reported it recorded seismic activity in North Korea, located near a nuclear testing site. Such reports have been associated with the isolated country's testing of nuclear bombs and has a tendency to increase geopolitical concerns, which cause investors to flock to safe haven assets and away from riskier ones.

On the supply front, a strong sale for $12 billion Treasury bonds due to reach maturity in 30 years helped drive down yields. The added supply of government paper can impact trading for Treasuries. The auction had a bid-to-cover ratio of 2.53, the highest level since September 2015.


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