A look at the day ahead in U.S. and global markets from Mike

Dolan

Even as public borrowing estimates were shaved on Monday, U.S.

Treasury yields continue to probe three-month highs as markets

lean toward a win for Donald Trump in next week's election and a

possible clean sweep in Congress for his Republican party.

In an event-packed fortnight that sees the first of this

week's five U.S. megacap earnings later on Tuesday alongside

critical job openings data, Wall Street stock indexes

remain buoyant near record highs.

But it's Treasuries that are bearing the brunt of election

anxiety, with many prediction models now suggesting a better

than even chance that Trump will win the White House and

Republicans take both House and Senate majorities on Nov. 5.

The Treasury said on Monday it plans to borrow $546 billion

in the fourth quarter, $19 billion lower than the July estimate,

but bond markets remain agitated by Trump's extensive tax cut

pledges with the government's budget deficit already running at

a whopping 6.4% of national output.

After edgy auctions of two- and five-year notes on Monday,

benchmark 10-year Treasury yields have topped 4.3%

for first time since July and Treasury volatility gauges

have hit their highest in over a year.

While the move comes as Federal Reserve easing expectations

for the coming year have been scaled back to as little as 130

basis points, election bets elsewhere also appeared to price a

growing chance of a Trump return to the White House.

Opinion polls show the race is too close to call, but shares

in Trump Media & Technology ( DJT ) have more than trebled in

the past month and Bitcoin hit its highest in almost five

months on Tuesday too.

With swingeing trade tariffs another marquee policy promise

from Trump, China's yuan hit its weakest in more than two

months. Mainland Chinese shares closed lower again.

Investor attention is on a Chinese leadership meeting on

Nov. 4-8. Reuters sources said China is considering approving

the issuance of over 10 trillion yuan ($1.4 trillion) in extra

debt in the next few years to bolster the economy, but it could

be higher in the event of Trump Presidency.

Despite another set of jarring house price data in Hong Kong

that underscored the country's ongoing property bust, the Hang

Seng closed higher as HSBC beat third quarter

profit expectations and its shares gained almost 3% to six-year

highs - helped by a fresh $3 billion stock buyback.

In Japan, the political stalemate after weekend elections

there saw the yen languishing near three-month lows

through 153 per dollar amid doubts about whether a new coalition

would support further monetary tightening by the Bank of Japan.

Yuichiro Tamaki, head of the opposition Democratic Party for

the People and possible 'kingmaker' in a new government, said

the BOJ should avoid overhauling its ultra-loose monetary policy

for now and focus on whether real wages turn positive.

The dollar was steady more broadly, with the euro

marginally firmer ahead of key euro zone GDP and

inflation numbers later in the week.

European shares were higher, with Britain's

FTSE100 outperforming slightly on HSBC's results and

ahead of the pivotal UK budget statement on Wednesday. The pound

too held the line.

Back on Wall Street, Alphabet's earnings after the

bell on Tuesday are the first of five 'Magnificent Seven' stocks

reporting this week and will set the tone for digital and tech

giants that dominate the S&P500. Its stock was a tad

higher in Frankfurt on Tuesday.

U.S. stock futures were a touch higher ahead of

today's open. The VIX stock volatility index hovered just

below 20.

Boeing's ( BA ) shares dipped 2.8% on Monday after the

planemaker launched a stock offering that could raise up to $22

billion in a bid to shore up its finances amid an ongoing worker

strike.

Other stocks of note reporting today are Advanced Micro

Devices, First Solar, Pfizer and MacDonalds.

Crude oil prices nursed Monday's heavy losses on

easing Middle East tensions and skulked below $68 per barrel.

Key developments that should provide more direction to U.S.

markets later on Tuesday:

* US September job openings, international trade balance,

retail/wholesale inventories, August house prices, Dallas

Federal Reserve's October service sector survey; Brazil Sept

current account

* US corporate earnings: Alphabet, Advanced Micro Devices,

McDonald's, Pfizer, PayPal, Corning, First Solar, Visa, MSCI,

Sysco, DR Horton, Edison, Chubb, Caesars Entertainment, EQT,

Stanley Black & Decker, Ecolab, American Tower, Masco, Incyte,

FirstEnergy, Zebra Technologies, Royal Caribbean Cruises, IDEX,

FMC, Mondelez, Stryker, DaVita, Essex Property etc

* Bank of Canada Governor Tiff Macklem speaks

* US Treasury sells $44 billion of 7-year notes and also sells

2-year floating rate notes; sells $48 billion of 12-month bills

(Editing by Christina Fincher

[email protected])