Hedge Funds Turned Bearish on Treasuries Right Before Rally
- Leveraged funds shift toward shorts by most since pandemic
- Many speculators stay long 10-years as flattener bets popular
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Speculators got their bond-market timing awry last week, ramping up bearish bets on Treasuries just as the emergence of the omicron variant sparked a global rally.
Leveraged funds increased net short bets on Treasuries by the most since April 2020, according to data from the Commodity Futures Trading Commission to November 30. But bonds continued to rise, with the Bloomberg U.S. Treasury Index hitting its highest since September on Friday, suggesting the recent rally may have been spiced up by a short squeeze.