A growing number of bond traders believe the recent selloff in US Treasury bonds will soon lose momentum. The downturn, triggered by a strong jobs report and concerns about future Federal Reserve interest rate cuts under President-elect Donald Trump’s policies, has seen 10-year yields rise to 4.8%. However, some traders are placing bets that yields will fall back to 4.6% by February 21, with options contracts indicating this outcome is increasingly likely.
A recent survey of JPMorgan clients found the largest long bias on bonds since 2023, suggesting increased optimism among investors about the market’s prospects. As a result, traders are taking positions that anticipate a shift in market sentiment, which could lead to a decrease in yields.
Source: https://www.bloomberg.com/news/articles/2025-01-14/bond-traders-wager-slump-set-to-ease-with-key-cpi-data-ahead