NEW YORK: US Treasury yields fell on Tuesday as nervousness ahead of France's first round of Presidential elections this weekend and ongoing geopolitical tensions increased demand for safe-haven US debt.
French opinion polls show far-right leader Marine Le Pen and centrist Emmanuel Macron qualifying next Sunday for the May 7 run-off, but the gap with conservative Francois Fillon and far-leftist Jean-Luc Melenchon has been tightening.
Rising tensions between US and North Korea have also put investors on edge in recent weeks.
US Vice President Mike Pence reassured Japan of American commitment to reining in North Korea's nuclear and missile ambitions on Tuesday, after warning that US strikes in Syria and Afghanistan showed the strength of its resolve.
"There are election fears in France and geopolitical fears in Asia," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
British Prime Minister Theresa May also called on Tuesday for an early election on June 8, saying she needed to strengthen her hand in divorce talks with the European Union by shoring up support for her Brexit plan.
Benchmark 10-year notes were last up 8/32 in price to yield 2.23 percent, down from 2.25 percent on Monday. The yields have tumbled from 2.63 percent on March 14. Bonds have also been boosted by falling expectations that the Federal Reserve will raise interest rates an additional two times this year, as economic data disappoints and the Trump administration is seen as less likely to pass fiscal or tax reforms in the near-term.
Data on Tuesday showed that US homebuilding fell in March as the construction of single-family homes in the Midwest recorded its biggest decline in three years.
It came after weaker retail sales and falling inflation data disappointed investors on Friday.
Futures traders are pricing in a 44 percent chance the US central bank will raise rates at its June meeting, down from 71 percent on April 6, according to the CME Group's FedWatch Tool.
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