The last time hedge funds and asset managers were this split on the future for benchmark Treasuries was when the Federal Reserve’s tightening cycle was about to peak in late 2018.
Net-short leveraged fund positions in 10-year futures have grown to the biggest since 2019, according to the latest data from the Commodity Futures Trading Commission. Their more bullish institutional investor counterparts however, have seen net long positions climb to a record, in data going back to 2006.
Treasuries have rebounded this year on bets that the Fed will soon call an end to the harshest rate hikes in a generation. That may be fueling fast-money funds to short 10- year notes against their shorter-dated counterparts on expectations the deeply-inverted yield curve will soon begin to steepen.
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