Yields Fall Ahead of Midterm Results

Bonds rally ahead of midterm results. Treasury yields fell across a flattening curve today, the 2-year yield falling ~5bps to 4.66% and the 10-year yield falling ~8bps to 4.13%. While today’s move was without a major catalyst, the decline in rates has the 10-year Treasury yield back near pre-FOMC levels, making the roundtrip ahead of a heavy schedule of Fed speakers to come later this week. Elsewhere, equities had a positive day, as the S&P rose ~0.56% while NASDAQ saw gains of 0.49%.

US credit card balances hit record in Q3 as delinquencies begin to increase. Consumer credit balances at US banks increased 19% to $866 billion in Q3, and average credit lines jumped to an all-time high according to data from TransUnion. A senior consumer credit business leader at Transunion explained that as consumers deal with inflation, they are increasingly turning to credit, especially among subprime consumers. Potential delinquencies will be closely watched by market participants as rates continue to climb.

Day ahead. Fed members John Williams (hawkish voter) and Thomas Barkin (hawkish non-voter) will make public comments. Wholesale inventory data will be released at 11:00 AM ET.