The yield on the US 10-year Treasury note fell to 4.87% on Thursday, hovering near a two-month low, as a sharp sell-off in equities triggered a flight to safety. Investors continued to pare back exposure to technology stocks amid worries that a Democratic blue wave could weigh on AI and data centre investment.
The 10-year yield had already dropped by about 8 bps in the previous session following the midterm election results. Attention is now turning to Friday’s US jobs report for further insight into the health of the labour market.
Recent data have painted a mixed but broadly resilient picture: private employers added 86K jobs in October, according to ADP, while initial jobless claims fell to their lowest level in 57 years. In addition, third-quarter productivity growth exceeded expectations.
Against this backdrop, markets are currently pricing in roughly a 75% probability of a 25 bps Fed rate hike next month.