Good morning. Bond traders bet big on Fed rate cuts. Gaza peace deal falters. And Europe’s cheap energy. Here’s what people are talking about.
Bond traders are taking on a record amount of risk as they bet on a Treasury market rally fueled by expectations the Federal Reserve will embark on its first interest-rate cut in more than four years. The number of leveraged positions in Treasury futures has risen to an all-time high ahead of the central bank’s annual economic symposium in Jackson Hole, Wyoming, which starts Thursday. Fed Chair Jerome Powell will speak and provide more insights into the central bank’s monetary policy path. Open interest in futures, or the amount of risks taken by traders who can be long or short positions, peaked at a record of almost 23 million 10-year note futures equivalent, last week, CME Group data and Bloomberg analysis shows. That’s roughly $1.5 billion of risk per one basis point move in the underlying cash notes.
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