net short bets against the US Treasury The week ending last Tuesday reportedly touched the highest level in the last one year.
What happened: According to the latest report of Commodity Futures Trading Commission, Net-short leveraged fund positions in 10-year futures rose by nearly 150,000 contracts in the week ended last Tuesday, the biggest bearish shift since March 2022. informed of Bloomberg.
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Fast-money funds are temporarily hedging bets against longer-dated bonds after they took a hit during the volatility of the recent banking crisis, when they expected a sell-off in lower maturities, the report said.
Treasury yields rose on Friday after rising expectations for US labor data That federal Reserve Will hike rates by 25 basis points in May. Labour Department US economy added 236,000 jobs in March, reports economist 240,000 new jobs estimated,
rate path: The report said that traders are currently betting that the central bank will raise rates again in May as the US economy is showing signs of resilience despite the crisis in the banking sector. CME Fedwatch Tool This indicates a 66% chance of a 25 bps rate hike in the next policy.
The 10-year note yield was at 3.37% during Asian trade on Monday morning, up from Friday’s low of 3.25%. ProShares Ultra 20+ Year Treasury utb increased by more than 6.5% in the last five days while Vanguard Total Bond Market Index Fund ETF bnd increased by more than 1% during the period.
Expert Tech: Goldman Sachs Group analysts, including Praveen Korapatiwrote in a note that although US yields jumped after the jobs report, they remain below last week’s levels, according to a Bloomberg report, leaving room for more upward revaluation .
“The mix of March data should thus strengthen the case for a hike at the upcoming May FOMC meeting,” he wrote.
ANZ Research The Fed appears to have scaled down its March update of its inflation forecast, said a note. “The Fed has consistently underestimated inflation in recent days. There is no reason to think it won’t do so again, especially if financial conditions recover quickly after the collapse of some US banks,” Said this.
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