Treasury yields are falling as investors prepare for the medium term

Treasury yields were slightly lower on Monday morning, after a strong rally last week, as investors prepared for a week with mid-term elections in which Republicans would cede control of the House, as well 39, a meeting of the Federal Reserve.

The yield on 10-year treasury bills

TMUBMUSD10Y, + 1.91%

was down 0.7 basis points to 3.207%, the 2-year note yield

TMUBMUSD02Y, -0.56%

decreased by 0.9 basis points to 2.903%. The 30-year bond yield

TMUBMUSD30Y, + 2.05%

Trade has stabilized at 3.453%, around its highest levels in more than four years. Bond prices move in the opposite direction of returns.

Investors are preparing for mid-term as analysts predict the split of Congress, Democrats taking power in the House and leaving the Senate to Republicans. This political blocking potential has divided Wall Street, while market participants are wondering whether a legislative stalemate would be safe for risky assets.

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But investors say the most important concern is the continuation of trade tensions between the United States and China. Optimism about progress on the trade front came Friday after President Donald Trump said he was moving forward in talks after his chief economic advisor, Larry Kudlow, declared the White House not about to sign an agreement. interview with CNBC.

Lily: Proof that trade negotiations between the United States and China are the main catalyst of the stock market

"Regardless of who's coming to the House, I do not anticipate any legislation of real significance over the next two years in the markets and the economy. The administration got what she wanted in the tax bill. Perhaps more relevant in the short term, the results could determine the negotiating position of the administration with China in the eyes of Trump and Xi, "wrote Peter Boockvar, Senior Market Analyst at the Bleakley Advisory Group.

New York Fed President John Williams is scheduled to speak at 8:30 am ET, followed by Robert Kaplan, Fed Chairman, Dallas, at 7 pm. This decision comes before the Federal Open Market Committee meeting Wednesday to Thursday, with analysts expecting the decision-making group to remain in place until December. The gradual but steady pace of rate hikes led to higher yields across the bond market, putting pressure on stocks as companies feared higher borrowing costs.

As far as data is concerned, the Institute for Supply Management's service meter should be out by 10 am Economists surveyed by MarketWatch expect a reading of 58.6% in October, down from 61.6% the previous month.

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