Traders Go Long Treasuries After Hedge Funds Unwind Short Bets
- Citigroup model shows some positioning has flipped long
- Speculators covered SOFR, two-year shorts from record level
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Traders are leaning toward further gains in the world’s biggest bond market, after a rally that got a major boost from short-covering by hedge funds this month.
That’s the read from Citigroup Inc.’s latest modeling as well as Treasuries positioning data from the Commodity Futures Trading Commission. The scramble to dump short positions helped drive two-year yields down around 100 basis points from a March 8 peak above 5% as banking-sector turmoil led traders to exit bets on Federal Reserve tightening.