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The fixed income market observed a mixed yet fundamentally risk-off tone, with UST yields generally exhibiting upward pressure, especially in the short-to-intermediate segment, reflecting investor caution and hawkish repricing following recent central bank signals and resilient economic data. The UST 10Y yield showed marginal volatility but largely sustained levels near the 4.10% mark, closing October 31 around 4.11%, a three-week high at the time, indicating a pause in the multi-day rally that preceded it, driven by a slightly more hawkish Fed tone despite an expected rate cut. Shorter-term securities, like the 2Y, also climbed to over a one-month high, demonstrating acute sensitivity to the Federal Reserve’s updated stance, where officials stressed that further cuts were not guaranteed, contributing to persistent flattening or slight inversion pressure on the short end of the yield curve. Market-implied odds for a December rate cut saw a notable decline, falling sharply from near 90% to around 63%, illustrating the dramatic shift in near-term monetary policy expectations that pressured bond prices.

In the corporate fixed income space, the technical backdrop remained largely supportive, although credit spreads, particularly in Investment Grade (IG), are near historical tightness, suggesting limited room for further spread compression despite strong demand. IG corporate bonds continued to perform well, generally outperforming similar-duration Treasuries, benefiting from robust institutional inflows and lower-than-expected new issuance volume. The broader fixed income outlook for November 2024 is dominated by heightened sensitivity to the evolving political landscape and potential fiscal trajectory, with post-election scenarios pointing toward higher nominal yields and term premiums should inflationary fiscal policies materialize. This has led some strategists to project a modest rise in the UST 10Y target to 4.25% within a 12-month horizon, shifting the overall sentiment toward a neutral duration stance for the near future, favoring shorter-dated, high-quality credit for carry.