A poor auction of gilts today has been compounded by a broad selloff in global fixed income following a strong US ISM services report. That's helped to press UK 10-year yields 7 bps higher and marginally above last week's high.

The Chancellor's October 30 budget unveiled a significant fiscal expansion, exceeding market expectations across all areas. The package increases government borrowing by over £30 billion annually compared to the Spring Budget forecasts, representing a 1% rise in GDP terms.

The expansion was particularly notable in two areas:

Mixed in with that is a broader selloff in fixed income that has come alongside stronger US economic data and a sense that a red sweep could be coming tonight.

That's the backdrop for a 10-year US sale at 1 pm ET that will be very tricky. Bond buyers may be reluctant to step in without knowing the composition of congress. Real money isn't in the speculation game and so that should sideline a good chunk of buyers and likely push yields even higher from here.

US 10s were last up 4.4 bps to 4.35% and that increased after today's strong ISM services report.