The three questions bond investors are asking about the US election

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UK Telegraph:

 

With the UK economy barely growing and most of Europe in a downturn, it is a prospect that would likely see investors race for the perceived safety of US government bonds.

 

A Romney victory alongside the Republicans keeping control of the House of Representatives - and possibly capturing the Senate - is seen by most in the markets as the surest way of avoiding the worst of what the fiscal cliff threatens. The spending cuts would stay but the tax rises would not.

 

By contrast, the re-election of Obama with Republicans controlling Congress is perceived as the combination with the highest chance of failing to reach a deal that skirts the cliff. Although each sides blame the other, it was the same combination that took the US to the brink of default last summer during the debt ceiling negotiations.