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(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 BetBenchmark 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 investor
The Democratic-held House aims to pass the bill on Tuesday, and send it to President
Joe Biden for his signature before a March 14 deadline to renew unemployment aid programs. Biden said Saturday that Americans will start getting their stimulus checks this month. We believe it is logical for yields to test the 2020 highs (1.95%) as most asset classes have already broken above their respective 2020 highs, JC O Hara, chief market technician at MKM Partners, said in a note. Our best guess is that yields will not move to that level in a straight line.
Treasury yields have been moving rapidly higher recently amid expectations of economic recovery from the pandemic and concerns about a rise in inflation.