Treasuries

James Mackintosh

Market outlooks for the US election were clear: an Obama victory would be bad for shares and good for bonds, as the incumbent president would have less chance of cutting a deal with an intransigent Congress than his challenger.

Barack Obama would also be bad for the dollar, as there would be no pressure on the Federal Reserve from a hawkish Republican to tighten monetary policy, meaning the easiest monetary policy ever would remain in place. 

James Mackintosh

Bonds have been rallying hard since Mario Draghi of the European Central Bank raised the prospect of a eurozone solution.

But perhaps what really matters is the US presidential election in November. Uncertainty ahead of the election tends to push investors into bonds, says UBS. It looked at the development of Treasury bond yields in the run-up to elections (excluding 2008, which was overshadowed by the financial crisis).