MediumIV Macro Policy & Sovereign Debt3 November 2026, Tuesday
Treasury yields climb on election day ahead of the refunding statement
According to the US Treasury's par yield curve, the 10-year yield closed 3 November at 4.95% and the 30-year at 5.32%. Both maturities were 4 basis points higher than on 2 November.
In the Treasury data, the 2-year rose from 4.59% to 4.61% and the 20-year from 5.31% to 5.35%. The 20-year remained 3 basis points above the 30-year on the curve. On Tradeweb quotes, the 10-year climbed from 4.893% at the 2 November settlement to 4.948%. By Talay's calculation, the 2s10s spread widened to 34 basis points.
With voting in the midterms still under way, the outcome was unclear; Trading Economics reported that prediction markets gave the Democrats a 74% chance of taking the Senate. Laura Cooper of Nuveen treats the election effect as near-term noise. In her view, an elevated term premium, the extra yield investors demand for holding extended-maturity bonds, will limit any fall in yields. Patrick Munnelly of Tickmill pointed instead to the mechanics of the debt ceiling.
According to the WSJ, the Treasury will publish its quarterly refunding statement on Wednesday 4 November, and the BoE will announce its rate decision on Thursday 5 November. On the same day the 10-year gilt rose 3.9 basis points to 5.230%. Gold, according to Kitco, closed 3 November at 3,929.40 dollars an ounce, down 16.30 dollars. The 4.96% 10-year quote CNBC reported that day differs from the Treasury close by 1 basis point.
Talay assessment
Bottom line
The election-day rise rests more on supply and labour data than on politics: JOLTS came in strong, and the refunding statement lands a day later. The 30-year's move to 5.32% shows the Treasury's freeze on coupon sizes cannot fully protect the far end of the curve. The most likely path, if the statement keeps auction sizes unchanged, is for the far end to oscillate around 5.3%.
Likely effects
- Term premiumNegativeWeeks
The elevated term premium Nuveen highlights limits any move by the 10-year below 4.9%, whatever the election outcome.
- Federal interest burdenNegative1–6 months
A far end holding above 5.3% pushes the Treasury to lean on bills, shifting interest-rate risk to the front of the curve.
- Türkiye fundingNegative1–6 months
A US 10-year at 4.95% keeps the yield floor high for Türkiye's dollar-denominated eurobond issuance.
Possibilities, ranked
- 1Unchanged sizes, narrow range55%
The refunding statement holds auction sizes steady and the 10-year stays between 4.85% and 5.00%.
Watch: Refunding statement on 4 November at 16:30 TRT
- 2Pressure on the far end30%
The statement hints at larger coupon auctions, or payrolls come in strong, and the 10-year breaks above 5%.
Watch: A 10-year close above 5.00%
- 3Post-election relief15%
A divided Congress dampens expectations of fiscal expansion and yields return to 2 November levels.
Watch: The 10-year falling below 4.91%
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- US 10-year▲ 4.95%
- US 30-year▲ 5.32%
- Gold (ounce)▼ $3,929.40
Historical context
US 10-year yield, last 6 months
- 117/09 · Fed dot plot median for 2026 rises to 4.00-4.25% while the 10-year yield eases from 5.04% to 4.94%
- 221/09 · The Fed's Goolsbee: if inflation is coming from demand, the rate response will be sharper and front-loaded
- 323/09 · US Treasury sells $70 billion of 5-year notes at 5.033%; after hot PMIs the 10-year yield hits 5.10%, its highest since 2007
- 424/09 · India's Sensex falls 1,247.71 points to 73,580; rupee presses against the 96 threshold as Brent tops $102 and the US 10-year yield exceeds 5.11%
- 524/09 · US Treasury sells 44 billion dollars of 7-year notes at 5.085%: highest yield since April 1993 as indirect demand falls to 57.2%
- 624/09 · No joint statement at Xi–Trump summit: tariff truce extended by just 2 months from 10 November to 10 January, no new decisions on chips or rare earths
- 725/09 · Michigan consumer sentiment at a 4-month low of 48.1, 1-year inflation expectations jump to 4.6%; US 30-year yield rises to 5.50%
- 827/09 · Bessent urges Fed flexibility on rates, citing AI productivity
- 928/09 · US ten-year Treasury yield climbs to a 19-year high
- 1029/09 · US long-dated yield holds above 5.5% despite Treasury buybacks
- 1130/09 · Softer US inflation erodes the odds of an October rate rise
- 1201/10 · US Treasuries pull back from their peak as two-year yield drops 10 basis points
- 1302/10 · Logan seeks 50 more basis points while most of the Fed waits
- 1405/10 · Nasdaq hits record as Treasury yields touch 24-year high
- 1506/10 · Fed's Schmid and Daly keep the door open to hikes despite high yields
- 1607/10 · Fed minutes point to one more rate rise before year-end
- 1707/10 · US ten-year auction clears at the highest yield in a quarter-century
- 1814/10 · US inflation climbs to 3.7%, putting an October hike back in play
- 1915/10 · US producer inflation jumps to 6.3%, yet Treasury yields fall
- 2016/10 · Warsh gives no rate signal in Bangkok and October hike odds fall
- 2119/10 · Barclays now expects Fed hikes in both December and January
- 2220/10 · US pending home sales sink to their lowest since 2001
- 2320/10 · Thirty-year Treasury yield slips below the 20-year point
- 2422/10 · US 10-year yield slips below 5% as tech sell-off deepens
- 2523/10 · US firms raise selling prices at fastest pace since 2022
- 2624/10 · Fed expected to hold on Wednesday as markets price a December hike
- 2727/10 · Domestic buyers displaced foreigners at the US two-year auction
- 2830/10 · Logan calls for at least two more hikes as December odds slip to 76%
- 2902/11 · US manufacturing beats forecasts as input prices stay high