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Posted: 2025-04-10 10:44:16 UTC
This article contains some claims that remain unverified. While much of the content may be accurate, exercise care when relying on this information.
This article contains some claims that remain unverified. While much of the content may be accurate, exercise care when relying on this information.
Status
Last Updated
2025-04-10 10:45:18 UTC
Verified By
Rollup News
The bond market experienced a significant disruption with the 10-year note yield surging 60 basis points in just 3 days, while the S&P 500 fell by 8%. This divergence is attributed to the unwinding of the basis trade, a strategy used by hedge funds to arbitrage the price differences between cash Treasuries and futures, often involving high leverage.
Largest 3-day increase in 10Y Note Yield since 1982
Unwinding of the $800 billion basis trade
Potential ripple effects due to highly leveraged positions
Broker-dealers facing capital constraints
Gold prices outperforming bonds as the basis trade unwinds
Unwinding of highly leveraged positions
Broker-dealers' capital constraints
Potential for ripple effects in the market
Increased volatility impacting arbitrage strategies
Growing supply of US Treasuries