Election years always bring increased uncertainty to financial markets--some more than others.  This is definitely one of those years--not because of covid, but rather because full control of lawmaking by a single political party hangs in the balance.  Bonds may indeed wait to make their next big move until they know the Georgia senate results.  Between now and then, the year's last remaining economic reports and the success or failure of the $2000 stimulus upgrade may not be able to move the needle in any sort of alarming way, at least not at first. 

The risk--both to bonds and to GOP control of the senate--is that the stimulus upgrade narrative hurts the GOP senator's campaigns in Georgia.  We all know to take polls with a grain of salt these days, but if the delta is any indication, the most recent results from a few pollsters show a mild blue shift over the past 2 weeks. 

In any event, most pollsters agree the races are too close to call.  Will Georgia's swing voters care more about stimulus checks being too small or the government spending too much money?  That single question may determine who controls the government for the next 2 years.

Until the January 5th election, it wouldn't be shocking to see bonds continue consolidating in the same pattern we've been tracking since early December.  While a breakout is possible in the next few trading days, a significant and sustained breakout is much easier to imagine next Wednesday, or shortly thereafter. 

Today brings the year's last round of economic data with Chicago PMI leading things off at 9:45am and Pending Home Sales batting clean-up at 10am.  Chicago PMI has a decent history as a market mover, but not when we adjust for current market conditions, political considerations, and the time of year.  Unless the Senate moves convincingly toward or away from the stimulus upgrade, today's trading is more likely to be dictated by compulsory year-end considerations that have nothing to do with economic events.