Hedge Funds Buying Up Treasurys “Aggressively”

Hedge funds have been snapping up U.S. government debt, with new data showing large speculators have been “aggressively” buying 10 year Treasurys in the last week.

According to data from Bank of America Merrill Lynch (BofAML), hedge funds bought 10-year Treasurys to a net long position of $1.8 billion in the week ending July 22, overturning the net short position of $4.7 billion in the previous week.

That move followed a rout in U.S. government bonds in June and early July after the Federal Reserve signaled it would ease up on its bond-buying program later this year, if the economy kept improving.

Bond funds saw record outflows in June but Pimco’s Bill Gross, manager of the world’s largest bond fund, said he was keeping faith with Treasurys and urged other investors not to “jump ship” on U.S. government debt.

Now it seems some hedge funds are heeding his advice as they step back in and buy.

Weaker than expected data recently have also helped ease worries that the Federal Reserve will “taper” its monetary easing over the next few months. Yields on the 10 year bond have fallen to 2.49 percent on Tuesday from 2.76 percent on July 8.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze

centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu