US 10-Year Treasury Yield at 5%

The yield on the US 10-year Treasury note rose to 5% on Friday, following a 17bps drop in the previous session, which was the largest single-day decline in more than a year. Despite the modest rebound, cautious sentiment persisted as oil prices climbed further amid concerns over a potential escalation of hostilities in the Middle East, with the US midterm elections also less than two weeks away. Meanwhile, concerns over heavy AI-related spending continued to weigh on sentiment. The Federal Reserve is set to announce its monetary policy decision next week, with markets pricing in a roughly 91% probability of rates remaining unchanged. Meanwhile, the odds of a 25bps rate hike in December stood at around 76%.