US stock sell-off drives funds toward Treasuries, traders bet on further yield declines.

BlockBeats news, November 6 - Ahead of Friday's release of the US October employment report, bond traders have bet on further gains in the US Treasury market, while market expectations for the Federal Reserve to continue raising interest rates have continued to cool. Global stock markets suffered a sell-off after the US midterm elections, driving investors to turn to US Treasuries for safe haven this week, with the 10-year Treasury yield falling to its lowest level since early September on Thursday.

As the stock market sell-off intensified further, the 10-year Treasury yield stood at 4.82% on Friday. The recent rally in the bond market has strengthened traders' confidence in further declines in yields. A trade in the options market bets that the 10-year Treasury yield could drop to 4.7% by the end of next week; another trade expiring on November 20 bets on the yield falling to about 4.35%.

Gennadiy Goldberg, head of US rates strategy at TD Securities, said he expects Friday's data to be slightly weak, but the market remains primarily focused on economic fundamentals. He noted that the US economy remains quite strong, with the labor market showing a "low hiring, low firing" state, so the market has already significantly reduced rate hike expectations over the past few weeks.