(Updates yields, adds analyst comments and Treasury announcement) By Karen Pierog CHICAGO, Nov 4 (Reuters) - Long-dated U.S. Treasury yields fell from five-month highs on Wednesday after an unexpectedly close U.S. election raised concerns over prolonged uncertainty and the fate of further stimulus measures to revive the pandemic-slammed economy. The race remained down to a handful of states, and both Republican President Donald Trump and Democratic rival Joe Biden had possible paths to reach the required 270 Electoral College votes to win the White House.. Treasury yields, which had climbed to multi-month highs ahead of the election results, plummeted when chances for a Democratic sweep that had been priced into the market faded. The benchmark 10-year yield, which hit a session low of 0.756%, was last at 0.7696%, well below a five-month high of 0.945% touched briefly overnight. The 30-year yield, which traded as high as 1.757%, was last at 1.5477%, up from a session low of 1.506%. A combination of a Biden presidency and Republican-controlled Senate "reduces the chances of fiscal stimulus in the short term and an infrastructure spending package in the intermediate term, both of which on the margin reduce growth, inflation, and Treasury supply expectations," said Guy LeBas, chief fixed income strategist at Janney Capital Management in Philadelphia. Meanwhile, the market mulled the possibility of a drawn-out court battle over vote counting. "In that environment, I think you see sort of a drift lower in rates and flatter in the curve," said Ben Jeffery, a strategist at BMO Capital Markets in New York. Meanwhile, the U.S. Treasury said on Wednesday it will sell $54 billion of three-year notes, $41 billion of 10-year notes and $27 billion of 30-year bonds next week. That followed Monday's announcement that it expects to borrow $617 billion in the fourth quarter, assuming enactment of an additional $1 trillion in spending. Republican U.S. Senate Majority Leader Mitch McConnell on Wednesday called on Congress to approve a new coronavirus aid bill by year end. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, was last at 62 basis points, falling from a session high of 77 basis points, the widest spread since mid-March. November 4 Wednesday 12:06AM New York / 1806 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0975 0.0989 0.003 Six-month bills 0.105 0.1065 -0.006 Two-year note 99-246/256 0.1447 -0.023 Three-year note 99-218/256 0.1756 -0.034 Five-year note 99-162/256 0.3243 -0.067 Seven-year note 99-160/256 0.5548 -0.095 10-year note 98-164/256 0.7696 -0.111 20-year bond 96-172/256 1.3167 -0.113 30-year bond 95-228/256 1.5477 -0.106 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 8.50 1.25 spread U.S. 3-year dollar swap 8.50 1.25 spread U.S. 5-year dollar swap 6.50 1.00 spread U.S. 10-year dollar swap 2.25 1.75 spread U.S. 30-year dollar swap -33.50 2.25 spread (Reporting by Karen Pierog in Chicago, additional reporting by Dhara Ranasinghe in London and Stanley White in TOKYO; Editing by Kirsten Donovan)
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