Traders Scrapped $100 Billion of Fed Bets in Friday’s Epic Move
- Open interest in CME Group’s eurodollar futures collapsed
- Popular steepening wagers turned sour as hikes got priced out
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A mass exodus from bets on higher rates appears to have accelerated Friday’s explosive Treasury-market rally during a holiday-shortened session.
In eurodollar futures -- an analog of the Treasury yield curve -- early positioning data show there was wholesale dumping as initial reports about the omicron coronavirus variant threatened to knock down expectations for multiple Federal Reserve rate hikes next year. Staggering declines in open interest across a range of contracts in CME Group’s preliminary data suggest that exits from hawkish Fed bets helped fuel the extreme gains.