Bond Futures at Risk From Rapid Hedging Overhaul as Yields Climb

A global surge in yields is threatening to cause a disruption in the Treasury futures market — the principal tool for hedging US government bonds — as traders stand to overhaul their positions.

Traders of CME Group Inc.’s futures contracts, especially those that track the Treasury’s longest-maturity bond, are at risk as rising oil prices stoke concern about inflation, sending yields higher. The US 30-year’s topped 5.1% on Friday, the highest level in about a year.