U.S. Treasuries jump on rising safe-haven demand as ongoing geopolitical tensions continue to hover

The U.S. Treasuries jumped Tuesday following a rise in demand for safe-haven assets as geopolitical tensions continue to weigh on investors’ risk sentiments. Also, it seems market participants have concluded that, in the current environment, the United States Federal Reserve is less likely to raise interest rates aggressively, a view strengthened by President Donald Trump’s comments last week that he likes the Federal Reserve’s low-interest-rate policy and that he thinks the US dollar is overvalued.

The yield on the benchmark 10-year Treasury slumped 2-1/2 basis points to 2.22 percent, the super-long 30-year bond yields plunged nearly 2 basis points to 2.89 percent and the yield on short-term 2-year note fell nearly 1-1/2 basis points to 1.18 percent by 11:50GMT.

Ongoing geopolitical tensions and the uncertainty surrounding the upcoming French election, continue to cast a shadow over global markets. But, despite this, sentiment is holding up remarkably well, particularly given ongoing doubts over President Trump’s ability to deliver economic stimulus.

Further, hopes are riding high that this week’s slew of US Q1 earnings results will deliver good news. Some softening in the U.S. administration’s bellicose rhetoric regarding North Korea has also been met with guarded optimism.

Meanwhile, the S&P 500 Futures traded 0.19 percent lower at 2,340.50 by 11:50GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -69.49 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex