Treasuries Soar as Big Futures Trades Show Bulls Are in Control
- Benchmark 10-year U.S. yield falls to lowest since June 29
- As health-care plan falters, traders wager on continued rally
Westpac's Rennie Says U.S. Markets a Bit Too Bullish
Traders in the Treasury futures market are growing more convinced that U.S. yields will be lower for longer, no matter what the Federal Reserve says.
The benchmark 10-year Treasury yield tumbled about six basis points to 2.26 percent in New York on Tuesday, reaching the lowest level since June. It broke through the 200-day average of 2.27 percent and nearly touched the 50-day mark of 2.255 percent.
The rally accelerated after two large block trades in 10-year Treasury futures, including a 23,865-contract purchase that was the largest since July 12. The transaction represented risk of almost $1.9 million per basis point. Whoever made that trade is staking a lot on the view that yields are headed downward, or giving up on a previous wager that rates will climb.