U.S. Treasury yields showed a mixed closing performance, significantly impacting the 2s10s yield curve, influenced by the U.S. election results. The short end weakened as market speculation about the Federal Reserve pausing its rate cuts by December or January intensified. According to OIS contracts, the probability of a rate cut dropped to about 60%.
In trading, short-term U.S. Treasury yields increased by 5-6 basis points, while long-term yields fell by 4-5 basis points. The 10-year Treasury yield ended around 4.31%, decreasing by about 1 basis point, hovering near the lower end of the weekly fluctuation range of 4.25%-4.48%.
The short end remained under pressure late in the session following a large block sale of 2-year Treasury futures, amounting to $360,000/DV01. The 2-year Treasury yield rose over 6 basis points, closing at 4.26%, just 5 basis points shy of Wednesday's multi-month high.
