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The U.S. government shutdown has prompted funds to take a safe haven, and traders are betting that U.S. Treasury yields will continue to fall

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2025-10-21 22:42:09
Bond traders are bracing for a further fall in US Treasury yields, even as the 30-year yield fell to a six-month low on Tuesday. The cost of betting on options to protect against a sharp fall in yields is rising rapidly, data show. With the US government shutdown on the verge of becoming the second longest on record, coupled with renewed concerns about credit markets and rising trade tensions, traders are piling into high-quality safe haven assets. The rally in the Treasury market is pushing the entire yield curve lower. "The tactical deployment is clear in terms of positioning - do it all and the market is rapidly chasing the appreciation trend of US bonds," wrote David Bieber, strategist at Citi.
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