The yen and the dollar climbed while commodity and emerging-market currencies weakened with U.S. Secretary of State John Kerry preparing to visit Kiev as Russia seized control of Ukraine’s Crimea region, intensifying one of the most serious standoffs since the Cold War ended.
The U.S. sale of $32 billion of two- year notes drew the strongest demand in eight months from a class of investors that includes foreign central banks on bets the Federal Reserve will maintain record low interest rates.
Treasuries declined, with 10-year yields climbing from a two-month low, as the U.S. auctions $64 billion of notes, the first time it conducts two fixed-coupon debt sales in a single day since October 2008.
Treasury 10-year note yields fell to the lowest level in two months as investors sought a haven from emerging-market turmoil even with the Federal Reserve forecast to announce a second reduction in its bond-buying program.
Treasuries rose as an unexpected drop in a nonmanufacturing index last month showed an uneven economic recovery and fueled speculation the Federal Reserve will keep its interest-rate target at record lows.
Yields on 10-year Treasury notes climbed to a three-month high, gold sank and the Standard & Poor’s 500 Index fell from a record following the Federal Reserve’s decision to reduce bond purchases. European stocks rose, catching up with yesterday’s U.S. rally.