Brecession fears push US 10-year Treasury yield to all time low

The US Treasuries surged as investors continue to seek sovereign debt as a shelter from the fallout of the Brexit vote. Also, investors wait for June FOMC meeting minutes (due at 18:00 GMT) in an attempt to estimate the Fed's likely next step.

The yield on the benchmark 10-year Treasury note fell 7 basis points to 1.390 percent (record low) and the yield on short-term 2-year note dipped 2-1/2 basis points to 0.573 percent by 12:40 GMT.

In the global market, the 10-year gilts fell nearly 3-1/2 basis points to 0.737 percent, The German 10-year bond yield fell to new low of -0.20 percent, Australian bond yield fell to record low of 1.848 percent and yield on the 10-year bonds JGB slid to record low of -0.277 percent.

Markets now look ahead to trade balance, ISM non-manufacturing and minutes from the June FOMC meeting. Given the mixed commentary seen from New York Fed President William Dudley (indicating it was too early to judge the impact of the Brexit vote) and San Francisco Fed President John Williams (indicating little material change), the June minutes could go a long way in revealing Fed concerns in advance of the referendum, something Fed Chair Janet Yellen indicated was a consideration in leaving rates unchanged in June.

Beyond the minutes, clear focus for the remainder of the week will be the June employment report on Friday, that could go a long way in further derailing any hopes of a rate hike in the coming months should further weakness persist.

Meanwhile, the S&P 500 Futures down 12 points to 2,070.5 by 12:40 GMT.