FX.co ★ US 10-Year Yield Hits Near Two-Month Low

The yield on the US 10-year Treasury note fell to around 4.85% on Thursday, its lowest level in nearly two months, as the Democrats’ decisive victory in the US midterm elections reduced political uncertainty and bolstered demand for both government bonds and equities. At the same time, artificial intelligence–related stocks came under pressure on concerns that Democratic control could weigh on future investment in data-center development.

The election outcome also reinforced expectations of political gridlock in Washington and diminished the perceived likelihood that President Donald Trump would resume military strikes against Iran. That shift helped trigger a sharp decline in oil prices, easing inflation worries and lowering market expectations for further aggressive interest rate increases.

Investors are now focused on Friday’s closely watched US employment report, with current market pricing implying a 79% probability of a Federal Reserve rate hike in December.