×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: gundlach | record | treasury | shorts | pain | squeeze

Jeffrey Gundlach: Betting Against Treasurys Could Backfire

Jeffrey Gundlach: Betting Against Treasurys Could Backfire
(Larry Metayer/Dreamstime)

Monday, 20 August 2018 08:50 AM EDT

A giant of fixed-income markets is warning that a build-up of speculative short positions in the U.S. Treasuries market is setting those traders up for pain ahead.

Net short positions on 10-year Treasuries from hedge funds hit the highest level on record, according to the latest data from the Commodity Futures Trading Commission.

For Jeffrey Gundlach of DoubleLine Capital LP, the extreme nature of that positioning has raised the risk of a possible short squeeze, where an increased appetite for U.S. bonds forces bearish investors to cover their bets.

"Massive increase this week in short positions against 10 &30 yr UST mkts. Highest for both in history, by far. Could cause quite a squeeze," Gundlach wrote on Twitter.

Bond investors have no shortage of catalysts to look forward to this week, with commentary expected from Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium and minutes from the central bank’s Aug. 1 policy meeting.

The yield on the 10-year note was at 2.86 percent Friday, up about 45 basis points from the end of 2017 but down from a year-to-date high of 3.11 percent in May.

Some other fund managers also believe that pessimism about the U.S. bond market may have gone too far. Nader Naeimi, head of dynamic markets at AMP Capital Investors in Sydney, said he started buying U.S. Treasuries last week and has gone long for the first time in at least two years.

“It’s amazing how far the market’s shorting Treasuries,” Naeimi said in an interview. “There’s a lot of complacency in U.S. assets right now, but there’s still the Trump-trade risk.”

© Copyright 2024 Bloomberg News. All rights reserved.


InvestingAnalysis
A giant of fixed-income markets is warning that a build-up of speculative short positions in the U.S. Treasuries market is setting those traders up for pain ahead.
gundlach, record, treasury, shorts, pain, squeeze
267
2018-50-20
Monday, 20 August 2018 08:50 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved