U.S. Treasury bond yields fell sharply as investors reacted to news that Russia had invaded Ukraine.
The yield on 10-year Treasury bonds fell by 9.2 basis points, reaching 1.885%, while the yield on 30-year bonds was 2.202% (-7.3 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, fell by 9.4 basis points to 1.506%.
Against the background of Russia's attack on Ukraine, the demand for safe haven assets, such as treasury bonds and gold, has significantly increased (prices for gold have reached the highest level since the beginning of January 2021).
Russian President Vladimir Putin said on Thursday that Russia will launch military operations in Ukraine. The decision was made a few days after Putin ordered troops into two breakaway eastern regions of Ukraine.
The escalation of the Russian-Ukrainian crisis also caused a significant increase in oil prices (Brent quotes rose above $100 per barrel for the first time since September 2014), which increased concerns about a further increase in inflation.
As for the US data, today at 13:30 GMT a report on GDP for the 4th quarter will be released (according to the forecast, GDP grew by 7% in quarterly terms), as well as data on the number of initial applications for unemployment benefits for the past week (economists expect that the number of applications amounted to 235 thousand). In addition, at 15:00 GMT a report on sales of new buildings for January will be released (according to the forecast, sales of new buildings fell to 0.806 million from 0.811 million in December).