Morgan Stanley: U.S. Treasury options indicate government shutdown could last up to 29 days

Jinse Finance reported that Morgan Stanley's interest rate strategists believe that the pricing of U.S. Treasury options indicates that the government shutdown, which began on October 1, will last at least 10 days and could extend up to 29 days. "U.S. Treasury futures options have priced in risk premiums on dates when important economic data is released," strategist Shaun Zhou said in a report. This includes the release date of the monthly employment report, one of the most important economic indicators in the United States. Due to the government shutdown, the September non-farm payroll data, originally scheduled to be released at 8:30 a.m. ET on Friday, was not made public. It also includes the September Consumer Price Index, which was supposed to be released on October 15. Morgan Stanley calculated that the probability of a shutdown lasting 10 to 29 days, as implied by options, exceeds 60%. The probability of a shutdown lasting 4 to 9 days is slightly above 20%, while the likelihood of it lasting at least 30 days is about 10%. The bank's report also stated that prediction betting platform PolyMarket also believes that the probability of a government shutdown lasting 10 to 29 days is the highest, but the probability of a longer shutdown is also significant.