US Treasury yields drop on North Korea, German election results

US Treasury yields fell on Monday as US-North Korean rhetoric and the rise of the far-right AfD party in German elections boosted haven demand for the long duration treasuries.

The benchmark 10-year yield posted its biggest single-day drop in over two weeks.

On Monday, the North Korean foreign minister RI Yong Ho said US President Donald Trump declared war on North Korea and that Pyongyang reserves the right to take countermeasures.

Meanwhile, a hollow victory for Angela Merkel and a surge in support for the far right AfD party stoked concerns about a more hardline stance towards the Eurozone.

The resulting safe haven demand for the treasuries pushed the 10-year yield to a low of 2.214%. The yield clocked a high of 2.289%, the highest level since Aug 8, after the Fed signaled it may raise interest rates at its Dec. 12-13 policy meeting.

The focus today is on Yellen speech scheduled at 16:45 GMT.