US Treasury market braces for a busy week: midterm elections plus Treasury refunding plan

US bondholders have just come off their best month in over a year, and now face multiple risks: the midterm elections, the Treasury's latest debt issuance plan, and a string of Federal Reserve officials' speeches. Investors will be closely watching Tuesday's vote results to judge whether Democrats can wrest control of Congress from Republicans. Since the mid-1990s, divided control of Congress or government has generally been favorable for US Treasuries. But some are skeptical, arguing that given the massive size of the federal deficit this time, that scenario may not deliver the same benefit for bonds. The following day, the Treasury will release its quarterly refunding statement. Many primary dealers expect adjustments to the guidance, possibly paving the way for reducing long-term Treasury issuance in 2027 while increasing the supply of short-term Treasury bills and shorter-dated notes. In addition, speeches by several Fed officials and major jobs data due out could all shift market expectations for the path of monetary policy.