U.S. Treasury yields climbed Tuesday ahead of the presidential election between President Donald Trump and Democratic candidate Joe Biden.
The yield on the benchmark 10-year Treasury note last traded up 4 basis points to 0.892%, its highest level since June 8. The yield on the 30-year Treasury bond jumped 5 basis points to 1.677%. Yields move inversely to prices.
“Investors’ interest in bidding up domestic equities and selling Treasuries could simply be a reflection of pricing out a long, drawn out process – regardless of who ultimately occupies the White House in 2021,” Ian Lyngen, BMO’s head of U.S. rates, said in a note on Tuesday.
Biden holds at least narrow leads over Trump in the six 2020 election swing states of Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin, according to a CNBC/Change Research poll.
According to the U.S. Elections Project, a full day before the election, more than 94 million votes had already been cast. This exceeded or neared the total voting levels in the 2016 election.
“Our conviction remains high that a relatively quick process that delivers known election results will clear the path for a breach of the 95.5 bp support in 10s, with a challenge of 1.0% to follow in short order,” Lyngen said.
Traders will also be watching out for data from the U.S. economic optimism index, as a measure of consumer confidence. Factory orders from September, another indicator of economic health, will also be released on Tuesday. Both sets of data are due out at 12 p.m. ET.
Auctions will be held on Tuesday for $34 billion worth of 52-week bills, $30 billion of 119-day bills and $30 billion of 42-day bills.
— CNBC’s Lauren Feiner contributed reporting to this story.
