The yield on the US 10-year Treasury note inched up to 4.9% on Thursday, partially retracing the roughly 8 bps decline seen in the previous session. That earlier drop followed a Democratic sweep of Congress in the US midterm elections, which reduced political uncertainty and bolstered expectations for lower federal spending, tax cuts, and a potential diplomatic breakthrough in the conflict with Iran.
Attention is now turning to Friday’s jobs report for further signals on the strength of the US labour market. Recent data showed that private employers added 86,000 jobs in October, according to the ADP report, while initial jobless claims fell to their lowest level in 57 years. Third-quarter productivity growth also came in stronger than anticipated. In this context, markets are currently pricing in about an 83% probability of a 25 bps Federal Reserve rate hike next month, with an additional increase expected in 2027.
