AFS Markets Blog: Midday 04/11/2026

• Meanwhile in markets, red or blue, is it really all the same to punters? US equity futures and Treasuries have now erased most of their initial knee-jerk reaction after the scale of the Democratic victory became clear;

• In the early morning hours, S&P 500 futures were down nearly two percent from yesterday’s close. At pixel time, however, those jitters have dissipated, with futures now up half a percent on the day. The more tech-heavy Nasdaq futures initially declined nearly two and a half percent, but have since recovered and are up a quarter percent;

• At both the federal and state levels, many Democratic candidates ran on platforms opposing – or at least seeking to slow – data center construction. Any slowdown in data center expansion would put the brakes on the AI trade in equities. However, market moves remain contained, not that surprising as a Democratic victory was likely already (mostly) priced in. Some of the biggest losers in this space seem to be Elon Musk’s companies: SpaceX is down 7 percent in pre-market trading and Tesla more than 5 percent. This, though, appears to reflect some concerns over potential investigations into one of the biggest funders of Republican candidates this election cycle;

• Shifting to fixed income, US Treasury yields are down around 3bps across the curve at pixel time, although that is only half the size of the move at its height earlier this session. The move leaves USTs within yesterday’s trading range;

• Over in our neck of the woods, the Stoxx 50 is up by more than one percent this morning. One name that jumps out is Orsted, up 7 percent, a clear sign that Democrats are expected to push back against Trump’s anti-renewable energy agenda. The best-performing subindex this morning is actually the Stoxx Banks index, up nearly 4 percent. The sector had a tough run recently, and today’s rally still leaves it (barely) in correction territory;

• Bunds are largely holding near their closing levels this morning, but outside Germany we are seeing a more pronounced rally. French OATs are among the key beneficiaries, with the 10-year OAT yield down 6bps this morning. That has brought Le Spread to 156bps – its lowest level in nearly a week. Across the periphery, we are seeing Bund spreads tighten, and we want to highlight that the spread on fiscal saint Portugal is now back at its 50-DMA of 44bps – after what we consider to have been an unfair widening alongside France amid an indiscriminate periphery sell-off;

• Shifting to broader market commentary, the broad dollar has taken a hit following the midterm results – the greenback is down half a percent against major currencies and a quarter percent against emerging markets. Brent crude is holding near yesterday’s close, still trading slightly above the $100 a barrel mark, while European natural gas prices have fallen nearly 3 percent this morning. There seems to be optimism around diplomatic efforts to bring an end to the war, and even President Trump has acknowledged that the Iran war played at least some part in the electoral setback. Nevertheless, the war of words continues, with a statement released by Iranian Supreme Leader Khamenei (who has not been seen since succeeding his father) claiming that the US still seeks Iran’s unconditional surrender;

• Looking ahead, we’re keeping an eye on the US Treasury’s quarterly refunding announcement this afternoon, which will outline the Treasury’s borrowing needs. We also have the US ISM services PMI to look forward to. Tomorrow, there are plenty of events in store for us, including interest rate decisions from the BOE (consensus: a 25bps hike) and Norges Bank (consensus: a hold). On top of that, a long list of central bank speakers should keep our feeds filled throughout the day.

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