Hedge funds massive short exposure on U.S Treasuries

[GordyG]

Could they get any more short?

What are the chances of another 2020 pop in treasuries?

"CFTC data show that asset managers' aggregate long position across two-, five- and ten-year futures was worth a record $1.083 trillion in the week to July 9. That has expanded nearly 30% since March.
Leveraged funds' aggregate short position across the curve now stands at $1.00 trillion, up around 25% from March and nudging last November's record high of $1.01 trillion.
Within that, asset manager longs and leveraged fund shorts in the five-year space are at all-time highs of $373 billion and $321 billion, respectively, while asset managers' long position in two-year futures was a record $477 billion in the week to July 2"

https://www.reuters.com/markets/rat...tures-positions-extremes-mcgeever-2024-07-15/

 

[trend2009]

I did not get it. The hedge funds expect the treasury rate is going up? All the talks on Wall Street are when and how much the fed cuts the rate.

 

[mervyn]

I did not get it. The hedge funds expect the treasury rate is going up? All the talks on Wall Street are when and how much the fed cuts the rate.

i am short 3 lot zn myself.

yield drop last week is priced in 1 full percentage cut, more than what the fed is willing to do.

 

[2rosy]

The word hedge fund isn't in the article. Article states positions are at extremes. The title of the thread is nonsense

 

[trend2009]

i am short 3 lot zn myself.

yield drop last week is priced in 1 full percentage cut, more than what the fed is willing to do.

The current 20 year bond interest is 4.4%, and current fed rate is 5.5%. If the current fed rate cuts to 4.5%,what would be the 20 year bond rate?

 

[GordyG]

The word hedge fund isn't in the article. Article states positions are at extremes. The title of the thread is nonsense

Is this article nonsense aswell?

"Small Group Of Hedge Funds Wields Dominance In US Treasury Market: 'A Concentration Of Vulnerability Has Built Up,' IMF Warns"
https://finance.yahoo.com/news/smal...Ak6UT4jx0fSA8WCtlTjrbvgO02MverwJjK_yVgJSD_I4o

Leveraged funds basis trade?

 

[deltaf0rce]

I am picking up duration wherever I can get hands on it for clients. 30 year T’s, looking for a 15% run

 

[2rosy]

Is this article nonsense aswell?

"Small Group Of Hedge Funds Wields Dominance In US Treasury Market: 'A Concentration Of Vulnerability Has Built Up,' IMF Warns"
https://finance.yahoo.com/news/smal...Ak6UT4jx0fSA8WCtlTjrbvgO02MverwJjK_yVgJSD_I4o

Leveraged funds basis trade?

Was it fact checked? If true, clearly we need more regulation on lenders.

 

[mervyn]

The current 20 year bond interest is 4.4%, and current fed rate is 5.5%. If the current fed rate cuts to 4.5%,what would be the 20 year bond rate?

by your number 4.4 and 5.5, paper value is about 114ish. twe now trades at 125ish, this gap is to be exploited.

anyway doesn't matter what bond price model you use, fed overnight funds rate projected to 20 years is an impossible task. long fund will go long anyway because they are convinced the rate cutting cycle is strating, which i went long in april and may this year after hot cpi print. market overreacted and my 10 lots zt long trade made over 5 figures in 4-6 weeks when market calmed down. now market is overreacted again, it is up to you to decide long or short.

 

[ZBZB]

They may be long 30 year against it going for, guessing, a flatlining curve.