The yield on the US 10-year Treasury note inched up to 4.91% on Tuesday, after having fallen 3bps in the previous session, as US voters headed to the polls for the midterm elections and investors awaited key economic releases, including the JOLTS report. Democrats are widely expected to take control of the House, while the outcome of the Senate race remains uncertain. The elections are broadly seen as a referendum on President Trump's second term.
At the same time, oil prices rebounded after reports that the US had struck Iran’s Qeshm Island, clawing back some of the losses from a nearly 7% plunge in the prior session.
On the fiscal front, the US Treasury said it expects to borrow $618 billion in the fourth quarter, $10 billion less than its August projection. The downward revision reflects a higher-than-anticipated opening cash balance, partially offset by lower projected net cash flows. However, excluding the benefit of the larger initial cash buffer, borrowing needs are $24 billion higher than previously estimated.
