Treasury prices rose, pushing down yields, on Tuesday as growing geopolitical risks in the week ahead drew investors into U.S. government paper and assets perceived as safe.
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The yield on the 10-year Treasury note slumped 3.5 basis points to 2.148%. Bond prices move in the opposite direction of yields one basis point is one hundredth of a percentage point. The yield on the 2-year note fell 2 basis points to 1.286%, while the 30-year bond lost 3.1 basis points to 2.808%.
Yields slid as a poll on Monday night showed the once-yawning gap between the Conservative Party and the opposition Labor Party has nearly closed, throwing uncertainty into the U.K. general election on Thursday in what was initially described as a sure-thing for Prime Minister Theresa May's Conservatives. May had called a snap election to consolidate her position to negotiate for better terms on the U.K.'s exit from the EU.
But the pound showed strength, rising to $1.2911 from $1.2903 at late Monday in New York.
See: U.K. election: The worst, best and most likely scenarios for stocks world-wide (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
Thursday could also set off further geopolitical jitters as the day's schedule will also include former Federal Bureau of Investigation Director James Comey's testimony to the Senate Intelligence Committee. The panel is looking into whether Russia interfered in the 2016 U.S. election and alleged connections between members of Trump's campaign and Moscow.
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The recent geopolitical concerns have helped gold and assets perceived as safety havens take in investors' money. Gold futures rose 0.90% to $1294.2 an ounce.
See: What to watch for when James Comey testifies to the Senate on Thursday (http://www.marketwatch.com/story/what-to-watch-when-james-comey-testifies-to-the-senate-on-thursday-2017-06-05)
On the same day, the European Central Bank will convene its policy meeting. Some analysts expect ECB President Mario Draghi and senior central bankers to give a more hawkish tilt to the policy statement's language in preparation for a reduction of quantitative easing at the end of the year. But weak inflation readings for the eurozone (http://www.marketwatch.com/story/eurozone-inflation-rate-falls-sharply-misses-view-2017-05-31)have made such an outcome more unlikely.
(END) Dow Jones Newswires
June 06, 2017 08:11 ET (12:11 GMT)