2017.09.2523:50:00UTC+00Demand for U.S. Treasuries Rise on Global Political Developments

Prices of U.S. government bonds rallied, following suit of their German peers, after the inconclusive result from Germany's election and the escalating war of words between the U.S. and North Korea prompted a modest influx toward safe-haven assets such as treasuries and gold.

The 10-year Treasury note yield declined more than 4 basis points to 2.220 percent. Meanwhile, the 30-year bond yield also fell to 2.758 percent by 4 bps. The two-year Treasury note yield fell 1.4 bps to 1.425 percent.

German government paper also moved in a similar direction. The yield for the German 10-year Treasury note declined 5 basis points to 0.399 percent. In the economics front, German business confidence measure has shown a decline as manufacturing also showed indications of slowing down.

The results of Germany's latest election raised doubts over the eurozone's political conditions. While German Chancellor Angela Merkel's conservative party secured 33 percent of the vote, the figures are still the lowest since World War II. Merkel's party is expected to head a new coalition government, but talks to form a stable state is expected to drag for months.