Treasury, European Bond Yields Tumble as Markets Lifted By U.S. Democrats' Victory — Update

By Emese Bartha

Yields on long-dated Treasurys, German Bunds and U.K. gilts fell to multiweek lows on Thursday following the Democrats' sweep in U.S. midterm elections and a consequent sharp fall in oil prices.

Bond markets cheered the prospect of fiscal restraint in the U.S., as the election result could lead to political gridlock, with a Republican President and Democrat-controlled Congress.

Oil prices also fell sharply on hopes that the Democrats' victory could accelerate efforts to end the Iran war, with the price of Brent crude for January delivery below $100 a barrel and last trading at last trading at $95.20.

Treasury yields fell across maturities after voters delivered a rebuke to President Trump and his party. Ten- and 30-year Treasury yields hit eight-week lows, then later recovered slightly but still traded lower on the day, according to Tradeweb. The 10- and 30-year Treasury yields last traded at 4.877% and 5.256%, respectively. Two-year Treasury yields fell to a two-month low on Wednesday and last traded slightly above that level.

"A Democratic Congress puts a stronger brake on further fiscal expansion, taking some upside risk out of long-term Treasury yields," said Shari Hensrud, chief investment officer at MissionSquare in a note.

In the eurozone, the 10-year German Bund yield fell to 3.252%--the lowest level since late August--while the 30-year Bund yield eased to 3.632%, a level unseen since mid-August.

The 10-year U.K. gilt yield fell to its lowest in over two months, while the 30-year gilt declined to a four-month low ahead of the Bank of England's interest-rate decision. A 25-basis-point rate hike is expected, though investors have trimmed rate expectations for the coming year due to lower oil prices.

"Relief after the blue wave is lifting all boats," said Commerzbank rates strategist Rainer Guntermann in a note.

The reduction in U.S. fiscal risk from a political gridlock could support longer-dated Treasurys, while shorter-dated Treasurys remain more tied to U.S. interest-rate prospects, inflation and labor markets, MissionSquare's Hensrud said.

At the same time, large deficits persist, and other key factors--such as the future trajectory of the dollar, regulatory risks in the AI sector, and the conflict with Iran--remain influential, Michael Titz, head of investment office at Bankhaus Herzogpark said in a note.

Write to Emese Bartha at emese.bartha@wsj.com

(END) Dow Jones Newswires

November 05, 2026 05:20 ET (10:20 GMT)