Traders are betting heavily that the 10-year US Treasury yield will return to 4% within weeks.
TL;DR
Traders are heavily investing in Treasury options, betting the 10-year yield will hit 4% soon, driven by recent yield increases and economic data analysis.
Traders are buying heavily in Treasury options, betting that the yield on the 10-year U.S. Treasury Odaily will rise back to 4% in the coming weeks—a level not reached since the end of November last year. This bullish bet comes as Treasury yields have actually risen slightly recently, with the 10-year yield hitting a high of around 4.20% earlier this month before fluctuating to 4.16% on Monday, as investors weigh the latest economic data and look for clues about the magnitude and timing of future interest rate cuts from Federal Reserve officials. CME Group open interest data released on Monday showed a surge in buying of 10-year Treasury options contracts expiring in March over the past week. The total premium paid for this position is unusually large, reaching approximately $80 million, and the number of open contracts has soared to 171,153, a 300% increase in one week. (Jinshi)