Bonds
Bond Traders Are Set for Rally to Extend as CPI Test Looms
- Long positions remain intact, but off recent extreme levels
- JPMorgan Treasury survey shows net longs at biggest of year
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Bond traders who’ve endured some dramatic swings lately are betting on big gains heading into Wednesday’s key inflation report.
US Treasuries rallied sharply at the start of last week, sparked by broader market upheaval and mounting concerns that a softening economy may force aggressive Federal Reserve interest-rate cuts. Even after traders subsequently unwound some of their more extreme bullish positions, the tone remains firm, with the market “tactically and structurally still extended long,” according to Citigroup strategist David Bieber.