U.S. Treasury yields rose on Wednesday morning, after the Republican party officially took control of the Senate following midterm congressional elections and after ADP reported private-sector job growth for last month. But yields turned flat later after data showed growth in the services sector slowed more than expected in October.
Yields on benchmark 10-year Treasury notes—used to calculate mortgage rates and other consumer loans—were last at 2.339 percent, down 1/32 in price. Yields and prices are inversely related.
The Institute for Supply Management's services index slid for a second month to 57.1 last month, missing analyst forecasts. But service-sector employment hit a fresh nine-year high.
The 30-year bond fell 5/32 in price to yield 3.058 percent in late afternoon.
The new Republican-controlled Congress could help drive a new Asia-Pacific trade pact and make for a more energy friendly environment in Washington, analysts said. It could also be a short-term catalyst for stock markets, unless the outcome is clouded by runoff elections.
On the downside, the GOP's victory will likely see ongoing policy stalemate in Washington.
"The Senate seat count is now 52 for the Republicans with two states still to declare and full control of Congress will likely mean some bills, unpopular with the democrats, will be heading to the White House for a signature that obviously won't be forthcoming. That suggests continued policy gridlock in Washington," said Derek Halpenny of the Bank of Tokyo-Mitsubishi in a research note on Wednesday.