U.S. Bond Yields Tumble on Election Uncertainty

LONDON, Nov 4 Reuters Longdated U.S. Treasury yields tumbled off fivemonth highs on Wednesday with the results of the U.S. election too close to call, raising concern about prolonged uncertainty and casting doubt over the fate of a muchneeded spending package.

This, together with a growing perception that the U.S. Federal Reserve may have to do more to support an economy grappling with the coronavirus, sparked a rush into U.S. Treasuries.

Ten and 30year Treasury yields were last down around 8.5 basis points on the day, each in their biggest oneday drop since June.

The benchmark 10year yield was trading at 0.80 , off session lows but well below fivemonth highs touched briefly during Asian trade at 0.945.

Thirtyyear U.S. Treasury yields fell to 1.57, while shortdated bond yields also fell but to a lesser degree .

Markets got what they really didnt want, with a lot of uncertainty this morning, said Jim Leaviss, head of fixed income at MG Investments in London. For bond markets, no blue wave means no hugely redistributive fiscal policy, no infrastructure boom, even if Biden gets elected.

By early Wednesday, the race was down to a handful of states, and both President Donald Trump and Democratic rival Joe Biden had possible paths to reach the needed 270 Electoral College votes to win the White House.

Since midOctober, U.S. longterm yields have risen rapidly as Bidens lead over Trump in opinion polls encouraged some investors to price in the chance of big fiscal…

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:News