By Ross Kerber Oct 26 (Reuters) – Longer-term U.S. Treasury yields fell on Monday and left the yield curve flatter as traders fearful a few fast-rising case rely within the COVID-19 pandemic and sized up a sophisticated battle for management of the U.S. Senate. The benchmark 10-year yield was down 2.7 foundation factors in morning buying and selling at 0.8144%, effectively under its four-month excessive reached on Friday. New infections touched file ranges in the USA just lately, with El Paso, Texas, asking residents to remain at dwelling for the subsequent two weeks, whereas in Europe, Italy and Spain imposed new restrictions. Merchants now fear about further lockdowns within the face of the pandemic that will gradual economies, a narrative the U.S. Treasury market appeared to disregard for a lot of October, mentioned Jim Vogel, rate of interest strategist for FHN Monetary. He mentioned traders additionally have been being attentive to the tight races that make it onerous to foretell which celebration will management the U.S. Senate in subsequent month’s elections and holding down Treasury yields. “There’s sufficient uncertainty as regards to how the Senate elections come out, it is simpler to attend relatively than promote Treasuries on the expectation of a sure final result,” Vogel mentioned. Democratic management, coupled with a predicted win for the celebration’s presidential candidate Joe Biden, is mostly anticipated to ship markets greater on the expectation of an finish to Washington gridlock, he mentioned. A carefully watched a part of the U.S. Treasury yield curve measuring the hole between yields on two- and 10-year Treasury notes, seen as an indicator of financial expectations, was at 66 foundation factors, about Three foundation factors decrease than Friday’s shut. The 2-year U.S. Treasury yield, which generally strikes in line with rate of interest expectations, was down lower than a foundation level at 0.1514% in morning buying and selling. October 26 Monday 9:13AM New York / 1313 GMT Worth Worth Present Internet Yield % Change (bps) Three-month payments 0.0925 0.0938 0.000 Six-month payments 0.1125 0.1141 0.000 Two-year word 99-243/256 0.1514 -0.004 Three-year word 99-202/256 0.1963 -0.006 5-year word 99-122/256 0.3573 -0.013 Seven-year word 98-148/256 0.5848 -0.018 10-year word 98-56/256 0.8144 -0.027 20-year bond 95-188/256 1.3717 -0.037 30-year bond 94-128/256 1.608 -0.038 DOLLAR SWAP SPREADS Final (bps) Internet Change (bps) U.S. 2-year greenback swap 8.25 0.00 unfold U.S. 3-year greenback swap 7.75 0.00 unfold U.S. 5-year greenback swap 6.50 -0.25 unfold U.S. 10-year greenback swap 2.75 0.25 unfold U.S. 30-year greenback swap -34.00 0.50 unfold (Reporting by Ross Kerber in Boston Enhancing by Nick Zieminski)