MUMBAI: Indian government bond yields are expected to trend higher in opening deals on Wednesday as US Treasury yields rose again, with early US presidential election results showing an edge for Republican candidate Donald Trump.

The benchmark 10-year bond yield is likely to move between 6.77% and 6.85%, compared with the previous close of 6.7931%, a trader with a private bank said.

“Benchmark bond yield could move in a wider range today and after opening higher, we would not be surprised if the trend changes based on the final election tally,” the trader said.

According to Associated Press, Trump is leading against Democrat candidate and current Vice President Kamala Harris, and could become the president again if these trends persist.

Trump won eight states, while Harris captured three states, but the outcome of the race remained uncertain with critical battleground states unlikely to be called for hours or even days.

As of 0100 GMT on Wednesday, polls had closed in 25 states.

The early results were as anticipated, with the contest expected to come down to seven swing states: Georgia, North Carolina, Pennsylvania, Arizona, Michigan, Nevada and Wisconsin.

India bond yields to trend higher as US peers spike

Opinion polls showed Trump and Harris were neck and neck in all seven going into Election Day. Trump had 90 electoral votes, while Harris had gained 27 electoral votes. A candidate needs a total of 270 votes in the state-by-state Electoral College to claim the presidency.

Trump’s policies on enacting higher tariffs on imports are likely to stoke inflation and put upward pressure on US yields, and slow down the pace of rate cuts from Federal Reserve.

The 10-year US yield rose in Asian hours and was around 4.38%, while the two-year yield that react more closely to interest rates was above 4.25%.

The elections would be followed by the Federal Reserve’s monetary policy decision on Thursday, wherein a 25-basis-point rate cut is priced in by the market, and guidance would be crucial.