Morgan Stanley: If US Treasury yields rise this week, one should decisively buy.

Jin10 data reported on October 7th, from historical data, this week typically performs poorly for the U.S. Treasury market. Morgan Stanley strategists point out that if this trend reappears this year, investors should “let go” and Buy the Dips. Over the past 25 years, October has usually been the worst-performing month for the U.S. Treasury market—with an average fall of 0.30%, and the decline mainly concentrated in the first half of the month. Especially in the week before Columbus Day holiday (which is October 13th this year), U.S. Treasury yields often decline. Morgan Stanley believes this pattern partly stems from the 10-year and 30-year Treasury auctions typically held that week. This year's auctions are scheduled for October 8th and 9th, and will not be delayed due to the federal government shutdown. The firm also noted that due to ample balance sheet space for traders at the beginning of the fourth quarter, it is easier to establish short positions. The Morgan Stanley interest rate strategy team stated that if this kind of market reappears this year, investors should act decisively. Their main basis is that unofficial data shows the U.S. labor market is weakening—despite the official data release being postponed due to the government entering its sixth day of shutdown.