US Treasury yields fall as Turkey's currency troubles spark pivot into safer assets

U.S. government debt yields fell on Wednesday as fears surrounding emerging markets continued to weigh on investor sentiment.

The yield on the benchmark 10-year Treasury note fell 4 basis points to 2.859 percent at 3:50 p.m. ET, while the yield on the 30-year Treasury bond dropped 3 basis points to 3.027 percent. Bond yields move inversely to prices.

US 10-YR
US 30-YR

U.S. Treasurys appeared to catch a safe haven bid Wednesday as lingering concerns over Turkey's financial crisis continued to spook traders around the globe.

Turkey's financial troubles have recently sparked fear of contagion with the country's currency having taken a deep slide in recent trading sessions. The free fall in the Turkish lira has put investors on edge and continues to be watched closely.

"The story for this week is clearly centered on Turkey, tariffs, the dollar, and weakness in the equity market," Kevin Giddis, head of fixed income capital markets at Raymond James, said in an emailed statement. "The economic data all but confirms that the U.S. economy is strong, but long-end investors prefer to trade with August data vs. July, so they merely shrugged it off and focused on a 'flight to quality' trade…with legs."

Pressure has been ramped up in recent days, as market-watchers became jittery over the Turkish president's control of the economy and U.S. leader Donald Trump saying last week that he was in support of doubling metal tariffs on the Middle Eastern country.

In the latest surrounding the topic, on Tuesday Ankara's government has announced new levies on American cars, cigarettes and alcohol, intensifying tensions between the two nations. The comes as the U.S. is already in a tit-for-tat trade dispute with a number of major economies, including China.