Ye Xie

(Bloomberg) -- US Treasuries are showing tentative signs of reclaiming their traditional role as a haven — threatening to wrong-foot investors who are heavily positioned for this year's bond slump to deepen.

Guibin Hong Fan Jiang Ye Xie Xiaowei Huang Runnan Shen Yun Wang Mengyi Zhu Haoxuan Wang

The US midterm election is less than a month away, and Wall Street is bracing for stocks to fall if Democrats regain control of both houses of Congress. Voters appear likely to hand the party a majority in at least the House of Representatives. The outlook for the Senate is far less certain, though Democratic candidates have a polling edge in key races. With control of even one chamber, the party would gain majorities on committees that can propose legislation and hold hearings — including on to

DoubleLine Capital’s Jeff Sherman said he remains bearish on long-term Treasuries, arguing that heavy government borrowing and weakening demand will continue to pressure the market.

Early on Oct. 14, just hours before the release of a much-anticipated report on US inflation, TD Securities’ Gennadiy Goldberg recommended that clients bet against a Federal Reserve interest-rate hike later in the month. The logic was that inflation would likely be benign enough to justify a hold. Equally important, a slew of Fed officials had spent days pushing back against expectations for an imminent move.

Markets have become so invested in the artificial intelligence trade that there is very little room for error if the massive spending doesn’t pay off, according to Citadel Securities.

Hot inflation data sparked bets on a Fed hike. Then traders changed course

Bond investors are growing skeptical that the potential return of gridlock on Capitol Hill will ease their worries about the US fiscal trajectory the way it has for decades.

A split Congress has often been a bullish recipe for Treasuries. Benchmark 10-year yields have been lower on average one and 12 months after midterms that produced such a result.

As investors flee Brazil following Luiz Inácio Lula da Silva’s surprise re-election, Rajiv Jain is preparing to do what he has done before: buy into the panic.