Treasury yields break the high
US 10-year yields are now up 4.4 bps on the day to 0.8670%. It’s highly unusual to see US stocks down 2-3% and Treasury yields higher.
There are two possible explanations:
- Month end flows
- Treasuries sensing a Biden win
Flows are flows so we will get an answer to that on Monday but a Biden win and blue sweep is a consensus call for higher yields because of larger deficits and more stimulus spending, which is inflationary. I think that’s a possibility here if only because the rout in stocks is so heavily skewed towards tech.
At some point both markets will need to agree but we’re probably going to be waiting until after the vote.