Yields hit three-month high on election uncertainty, economy
By Karen Brettell
NEW YORK, Oct 23 (Reuters) -Benchmark 10-year Treasury yields reached a three-month high on Wednesday on uncertainty about the results of the Nov. 5 U.S. election and as investors adjusted for the likelihood the Federal Reserve will be less dovish due to the strong economy.
Yields have ratcheted higher this week and 10-year yields have broken above key technical levels, including the 200-day moving average and the 50% Fibonacci retracement from their April to September fall.
Some of the move has been attributed to rising odds that Donald Trump will win the U.S. presidential election, with policies including tariffs and crackdowns on illegal immigration seen as sparking higher inflation.
Betting site Polymarket shows a 64% chance of Trump winning and a 36% probability of a victory by Kamala Harris.
Many investors are also generally hesitant to buy bonds before the results of the election become clear, with the fiscal outlook also depending on whether one party wins a majority in Congress.
“It seems like a little bit of a buyer's strike going into the election, at which point I would expect a lot of money to be deployed,” said Dan Mulholland, head of rates – sales and trading at Crews & Associates in New York.
“Along with that has also been a lot of strong data, so it's kind of a rethinking of the Fed's terminal rate, where we're going to end up,” he said.
Benchmark 10-year note yields US10YT=RR were last up 3.8 basis points at 4.244% and earlier reached 4.248%, the highest since July 26.
Interest rate sensitive two-year yields US2YT=RR rose 1.7 basis points to 4.054%. The yield curve between two-year and 10-year yields US2US10=TWEB steepened by around one basis point to 18.8 basis points.
Traders priced out the likelihood of the U.S. central bank making further 50 basis point interest rate cuts following a much stronger employment report for September than was anticipated.
The market is now pricing in a 68.3% chance of a 25 basis point cut at both of the Fed’s November and December meetings, a 29.4% chance of a cut at only one meeting and a 2.2% odds the Fed will keep rates steady through year end, according to the CME Group’s FedWatch Tool.
U.S. economic data this week is relatively light, with investors waiting on key releases next week including the Nov. 1 jobs report for October for further clues on Fed policy.
The Treasury Department will sell $13 billion in 20-year bonds later on Wednesday and $24 billion in five-year Treasury Inflation-Protected Securities on Thursday.
Reporting By Karen Brettell; Editing by Sharon Singleton
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
