US Treasury yields fall 7-8 basis points on Democratic sweep, CBA says

• Commonwealth Bank of Australia expects Democratic control of Congress to constrain major US spending changes but increase policy uncertainty.
• Presidential authority over tariffs, sanctions and export controls could become more important, exposing Australia through global trade links.
• US Treasury yields fell about 7 to 8 basis points across the yield curve, reflecting expectations of tighter fiscal constraints.
• The bank’s November 4 market note cautioned against overinterpreting the initial rally, citing substantial US deficits and borrowing requirements.
• Australian government bonds also rallied, though domestic factors influenced trading; US Treasury yields can affect Australian borrowing costs.

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