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Treasury shorts build up as yields hit multi-year highs
Traders are watching the Fed’s preferred inflation gauge and September jobs data, with futures open interest rising across five-year and 10-year contracts, CME data shows.
Bets that US Treasury yields will keep rising have intensified bearish positioning, raising the risk of a fast reversal if upcoming economic data points to a sharper-than-expected slowdown, according to a Bloomberg report cited by Hedgeweek.
Hedgeweek reports that Treasury yields have reached multi-year highs and that market participants are now focused on key data this week, including the Federal Reserve’s preferred inflation measure on Wednesday and September employment data due at the end of the week.
Hedgeweek also notes that economists expect the jobs report to show hiring slowed last month, which could prompt investors to unwind short positions if results are materially weaker than anticipated.
The article says futures positioning has expanded, with CME data showing five-year Treasury futures open interest rising in 11 of the past 12 sessions and 10-year open interest increasing in 13 of the past 14 sessions, alongside renewed strength in yields across the curve.