Treasuries Bear Frenzy Was the Biggest on Record Last Week

Cormac Mullen
·1 min read

(Bloomberg) -- Bond bearishness hit a record level last week as investors piled into short bets on Treasuries.

An aggregate gauge of the change in net non-commercial positions across the Treasuries futures curve dropped by the most on in record, according to the latest Commodity Futures Trading Commission data. The change was equivalent to $45 billion in benchmark Treasuries net short positions, according to TD Securities strategist Penglu Zhao.

“Specs piled into shorts across the curve last week as the market became agitated on Fed tapering and early hiking risks,” Zhao wrote Friday. “Dealers and levered funds were net buyers, while asset managers and other investors are net sellers.”

Bond Traders Go All-In on U.S. Treasury Market’s Big Short Bet

Benchmark 10-year Treasury yields touched 1.62% Friday -- the highest since February 2020 -- before pulling back. Bearish traders became emboldened after Federal Reserve Chairman Jerome Powell underwhelmed investors by refraining from pushing back more forcefully against the recent spike in yields.

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