Gundlach Sees More Pain for Bond Bulls as Hedge Funds Make Exit
- Thirty-year Treasury yield breaks through 50-, 200-DMA
- Speculators that went bullish the long end getting flushed out
Why Gundlach Thinks the Bond Wipeout Has Just Begun
Hedge funds that built up bullish long-end Treasury wagers to the highest outright level since 2008 are rushing for the exit as a government bond rout that started in Europe following a weak French debt auction is spreading to the U.S. market.
Thirty-year yields surged as much as seven basis points Thursday to 2.92 percent, breaching both 50- and 200-day moving averages. Open interest in September long-bond futures has dropped by around $3.7 million since June 28 in dollar-value per basis point move, or DV01, terms, a sign bulls are starting to liquidate positions in the sector. Speculators in recent weeks were the most bullish on 30-year Treasury futures on a net basis this year, according to Commodity Futures Trading Commission data.