Much as the lead up to the election drove negative volatility for bond markets on Tuesday, Wednesday's election results may well swing that volatility in the other direction if Obama emerges victorious.  At least that's the suggestion based on the logic that seems to be informing market movements over the past several sessions.  During that time, when Obama's prospects were seen to be more solidified, bond markets performed well. 

At the times where markets are entertaining Romney has a chance, bond markets sold off, or perhaps Tuesday's sell-off was simply a preparation for an unlikely possibility, but a possibility just the same.  If Wednesday morning isn't too soon to declare a clear winner, we'd hope to see some clearer direction for markets.  We'd even settle for some good, old-fashioned sideways indecision instead of the non-sequitur gyrations of the past few days.  Whatever the case, the election should be less capable of causing this kind of paradoxical volatility after the results are in.

The balance of the session offers little else to stir hearts and minds with only Consumer Credit and MBA Mortgage Applications for economic data releases.  Neither of those are likely market movers, which leaves only the 10yr Treasury Auction at 1pm to offer some sort of a posteriori commentary on the health of the bond market in light of election results.  It could take things a matter of hours or days to settle into the post-election groove, or the Eurogroup meeting on Thursday could soon take the spotlight.