10-year Treasury yield ducks below 2.40%
Treasury yields fell across the curve Wednesday as geopolitical concerns flashed following the White House's unexpected dismissal Federal Bureau of Investigation Director James Comey and North Korea said it would go ahead with its sixth nuclear test.
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The yield for the 10-year note fell 1.8 basis points to 2.380%, slipping from its eight-week high of 2.405% recorded a day before. Bond prices move inversely to yields; one basis point is one hundredth of a percentage point.
The yield for the 2-year note edged off 0.4 basis point to 1.343%, while the 30-year bond lost 1.1 basis point to post 3.016%.
Geopolitical concerns surfaced again from the recent placid landscape after President Donald Trump fired Comey last night on concerns he was "not able to effectively lead the bureau," Trump said in a letter. His ouster has helped remind investors of the unpredictable climate in the White House, and may leave a question mark on Trump's ability to reach across the aisle and pass tax reform in Congress.
See: Trump fires FBI Director Comey; Democrats call for special prosecutor in Russia probe (http://www.marketwatch.com/story/trump-fires-fbi-director-comey-democrats-call-for-special-prosecutor-in-russia-probe-2017-05-09)
Before the news from Washington, the North Korean ambassador to the U.K. said the country would go ahead with its sixth nuclear test, in an interview with Sky News (http://news.sky.com/story/north-korea-not-afraid-as-it-plans-new-nuclear-test-says-ambassador-in-uk-10870570), heightening tensions in the Korean Peninsula. South Korea's benchmark equity gauge, the KOSPI composite index fell 0.99% to 2270.12 on Wednesday, Both geopolitical flashpoints led investors to pile into assets perceived as safe like gold .
Traders will also focus on an auction of $24 billion in 10-year notes held at 1 p.m., one of many sales in a busy week for the Treasury Department as it puts $189 billion of U.S. government paper on the block. Auctions of Treasury notes can influence trading for the outstanding market.
Boston Fed President Eric Rosengren, a nonvoting member of the Fed, will give a speech to the Lake Champlain Chamber of Commerce in Vermont at 12 p.m. Eastern. A day ago, Rosengren said the central bank should begin cutting down the balance sheet "relatively soon," but the process should be "highly tapered" to give investors the time to get accustomed to a less active Fed. The Fed's efforts to shrink the balance sheet, taking a big investor out the Treasury market, can result in tightening of interest rates.
On his heels, the dovish Minneapolis Fed President Neel Kashkari, a voting member, will talk at the Minnesota Business Ethics Awards in Minnesota at 1:20 p.m.
(END) Dow Jones Newswires
May 10, 2017 09:35 ET (13:35 GMT)