Bond traders are investing millions of dollars in options, betting that the 10-year US nation will rise and yields will fall to a five-month low. Traders increased their bullish positions on Tuesday. The US government may shut down on Wednesday, or put pressure on the economy, and may reinforce expectations that the Federal Reserve will cut interest rates again in late October. BMO Capital Markets interest rate strategists Ian Lyngen and Vail Hartman wrote in Tuesday's report that investors seem to interpret the uncertainty that the government may shut down as helping the federal funds rate; of course, they agree with this explanation. The spot market also showed a similar bullish trend. J.P. Morgan Chase's survey of US Treasury customers showed that bullish positions rose to their highest level since early April.

Bond traders are investing millions of dollars in options, betting that the 10-year US nation will rise and yields will fall to a five-month low. Traders increased their bullish positions on Tuesday. The US government may shut down on Wednesday, or put pressure on the economy, and may reinforce expectations that the Federal Reserve will cut interest rates again in late October. BMO Capital Markets interest rate strategists Ian Lyngen and Vail Hartman wrote in Tuesday's report that investors seem to interpret the uncertainty that the government may shut down as helping the federal funds rate; of course, they agree with this explanation. The spot market also showed a similar bullish trend. J.P. Morgan Chase's survey of US Treasury customers showed that bullish positions rose to their highest level since early April.