Government shutdown drives funds to seek safety; traders bet on continued fall in U.S. Treasury yields.

Jin10 data reported on October 22, bond traders are preparing for further falls in U.S. Treasury yields, even though the 30-year Treasury yield fell to its lowest point in six months on Tuesday. Data shows that the cost of options betting on a significant fall in yields is rapidly rising. With the U.S. government shutdown set to become the second longest in history, coupled with renewed concerns about the credit market and escalating trade tensions, traders are flocking to high-quality safe-haven assets. The rise in the U.S. Treasury market is driving the entire yield curve lower. Citigroup strategist David Bieber wrote: “In terms of position, the tactical deployment is clear - go long on everything, as the market is quickly chasing the appreciation trend of U.S. bonds.”