US Treasurys trade in wide range as investors digest Donald Trump win
The U.S. Treasuries whipsawed Wednesday, as investors digested news that Donald Trump defeated Hillary Clinton in the U.S. presidential election in one of the biggest political upsets in the country's history.
Benchmark 10-year Treasury notes rose, yielding around 1.86 percent. Earlier, the notes were up over 1 point in price with a yield of 1.736 percent, down nearly 13 basis points from Tuesday's 3 p.m. EST level, according to Tradeweb data.
Opinion polls shortly before the election suggested Democratic candidate Hillary Clinton would capture the White House.
Clinton's policy stances on trade, immigration and fiscal matters were seen as supportive for financial markets, while Trump's views were viewed as hurting exports and injecting uncertainty into markets.
The sell-off in U.S. stock futures spurred safe-haven demand for lower-risk government debt, analysts said.
"We are seeing the uncertainty premium coming in. We are seeing stocks tanking and bonds rallying. If the Fed sees tighter financial conditions which could have a knock-on effect on the economy, it may reconsider raising rates next month," said Robert Tipp, chief investment strategist at Prudential Fixed Income in Newark, New Jersey.
The 10-year yield drop was the biggest since June 24 shortly following Britain's surprise vote to leave the European Union.
Short-dated yields declined sharply on growing expectations the Federal Reserve would refrain from raising interest rates at its Dec. 13-14 policy meeting to cushion markets from further turbulence.
Two-year Treasury yield was down just 4 basis points lower at 0.822 percent. It had fallen as much as 14 basis points at one point, which would be its biggest drop since March 2009, according to Reuters data.
At 4:20 a.m. EST, S&P 500 e-minis were down 37.25 points. Nasdaq 100 e-minis were down 116.5 points, and Dow e-minis were down 289 points.