 |
| US Bonds Review |
US Treasury bond’s overall trend, revealed by trends of price, leverage, and time, are defined in The Matrix for subscribers.
Subscriber Comments
Stress In The Banking System Rising
Late last week, a large block trade in the U.S. rates market appeared to position for the Federal Reserve’s expected announcement ending its balance sheet reduction program, or quantitative tightening (QT). The trade—40,000 November SOFR futures contracts—bet that the Secured Overnight Financing Rate (SOFR) will average less than nine basis points above the federal funds rate next month.
This position, with an estimated $2 million DV01 (rate sensitivity), is equivalent to holding roughly $2–3 billion in 10-year Treasuries. It reflects expectations that ending QT and a likely quarter-point rate cut will ease funding pressures and lower repo rates.
Currently, SOFR (4.24%) sits above the fed funds rate (4.11%), an inversion driven by tighter liquidity and heavy Treasury bill issuance. Analysts say halting QT should boost reserves, add liquidity, and pull repo rates lower. Some strategists view the trade as a direct bet on Fed policy changes, while others see it as a play on stretched short-term rate valuations.
Click to Read
Use your Subscription Level Access Code to access the full review.
Follow me on 𝕏 or Facebook for further discussion.
----------------------------------
The Matrix provides market-driven trend, cycles, and intermarket analysis.
