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Treasurys rise as investors head for safety in wake of Trump missile threat

Thomas Franck
  • Investors pivot to perceived safe havens like Treasurys after President Donald Trump threatens missile strike in Syria.
  • At 2 p.m. ET, the Federal Open Market Committee will publish its minutes from their March meeting, when the U.S. central bank raised interest rates and increased its GDP forecast.
  • The U.S. Treasury is set to auction $21 billion in nine-year and 10-month notes.

U.S. government debt prices rose Wednesday after Donald Trump threatened a missile strike in Syria, telling Russia to "get ready."

Treasury yields fell immediately after the president tweeted his threat , as investors fled for perceived safe haven assets like bonds and gold.

"Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and 'smart!'" Trump tweeted. "You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!"

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The yield on the benchmark 10-year Treasury note was lower at around 2.763 percent at 8:39 a.m. ET, while the yield on the 30-year Treasury bond was lower at 2.986 percent. Bond yields move inversely to prices.

Trump's tweet comes in light of a recent chemical weapons attack allegedly carried out by the government of Bashar al-Assad . Trump also criticized Russia's government in a rare rebuke on Sunday, scolding Vladimir Putin for Moscow's support of Assad.

A senior Russian official on Tuesday threatened to shoot down any U.S. missile that entered Syrian airspace amid rumors that Washington may take military action over the chemical attack.

U.S. consumer prices in the U.S. fell for the first time in 10 months in March, weighed down by a decline in the cost of gasoline. However, underlying inflation continued to firm amid rising prices for health care.

The Labor Department said on Wednesday its Consumer Price Index (CPI) fell 0.1 percent last month, its first since May 2017, after climbing 0.2 percent in February.

Excluding the volatile food and energy components, the CPI climbed 0.2 percent, matching February's increase. The so-called core CPI rose 2.1 percent year-on-year in March, the largest advance since February 2017, after increasing 1.8 percent in February.

The U.S. Treasury is set to auction $21 billion in nine-year and 10-month notes.

The latest minutes from the U.S. Federal Reserve are also due on Wednesday. At 2 p.m. ET, the Federal Open Market Committee will publish its minutes from their March meeting, when the U.S. central bank raised interest rates and increased its GDP forecast.

Investors will be keeping an eye on Washington, after news emerged that the FBI raided the New York office and residence of Michael Cohen, the personal attorney to President Donald Trump, on Monday.

Turmoil within the administration has put markets on edge as of late, in addition to concerns over trade tensions between the U.S. and China.



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