Are investors braced for too much post-election volatility?

Investors are braced for turbulence in the Treasury market, even allowing for the big moves that we’ve already seen in it recently. That’s hardly a surprise, given the result of tomorrow’s election is on a knife-edge and the contrast in the protagonists’ policy platforms. Yet even though we still think there is ample scope for a sizeable repricing in bonds once the outcome is clear, it’s by no means certain that the government bond market will seesaw by as much as investors are currently anticipating.