Traders are ramping up bets on further declines in the U.S. Treasury market, predicting that the policies Trump has promised to implement will reignite inflation and keep U.S. interest rates high. Data released on Tuesday showed that open interest in two-year note contracts rose for the fourth consecutive trading day. This suggests traders were building bearish positions after the election and before October inflation data was released on Wednesday. The expansion of short bets came as U.S. debt was sold off, with yields rising more than 10 basis points across the board on Tuesday. A measure of Treasury returns is just 1.4% short of wiping out year-to-date gains.
Traders are ramping up bets on further declines in the U.S. Treasury market, predicting that the policies Trump has promised to implement will reignite inflation and keep U.S. interest rates high. Data released on Tuesday showed that open interest in two-year note contracts rose for the fourth consecutive trading day. This suggests traders were building bearish positions after the election and before October inflation data was released on Wednesday. The expansion of short bets came as U.S. debt was sold off, with yields rising more than 10 basis points across the board on Tuesday. A measure of Treasury returns is just 1.4% short of wiping out year-to-date gains.
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