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  • The US 10-year bond yield hs slipped to one-month lows.
  • The government bonds are attracting haven bids amid the escalating US-Iran tensions. 

The yield on the US 10-year treasury note fell to one-month lows in early Asia on escalating US-Iran tensions and the resulting flight to safety. 

The benchmark bond yield declined to 1.757%, the lowest level since Dec. 5. At press time, the yield is trading at 1.77%, representing an 11 basis point drop on the day. 

Meanwhile, the two-year yield is also flashing red, having hit a low of 1.504% a few minutes before press time. That was the lowest level since Oct. 10.

Treasury prices are rising and yields are losing altitude, courtesy of US-Iran tensions and the resulting flight to safety. 

While Iran’s supreme leader Ayatollah Ali Khamenei has promised ‘severe revenge’ for the US killing of Iranian general Soleimani’s death, President Trump has said that the US will hit 52 Iranian targets very fast and very hard” if the Islamic republic attacks American personnel or assets.

Further, Iran has declared that it will no longer abide by any of the restrictions imposed by the 2015 nuclear deal.

The spiraling tensions are weighing over risky assets and boding well for anti-risk assets like government bonds, gold, and Japanese yen. 

The futures on the S&P 500 are currently down 0.45% and Japan’s Nikkei is shedding close to 500 points. Meanwhile, gold is trading at highs above $1,575, the highest level since April 2013.

The treasury yields could slide further if the risk aversion worsens in Europe.