Markets.com Logo
euEnglish
LoginSign Up

US Treasury Yields: Trader Positioning After Strong Jobs Report

Jul 11, 2025
4 min read
Table of Contents
  • 1. US Treasury Yields: Trader Positioning After Strong Jobs Report
  • 2. Uncertainty Dominates the Market

US Treasury Yields: Trader Positioning After Strong Jobs Report

Futures traders have recently started to scale back their large long bets on US Treasuries, further pushing up US Treasury yields after an unexpectedly strong non-farm payrolls report. This has resulted in significant market shifts, reflecting a state of uncertainty regarding the future path of interest rates.

On Tuesday, the benchmark 10-year US Treasury yield closed at 4.410%, marking a five-consecutive-day ascent. Prior to the jobs data release last Thursday, traders had built up substantial long positions in the Treasury market, anticipating that weak employment figures would reinforce expectations for interest rate cuts. However, the data swiftly shattered these expectations, and the risk exposure held by futures traders, i.e., the number of open contracts, rapidly declined in the following days. This deleveraging process is squeezing profits for investors betting on higher Treasury prices, with the changes primarily concentrated in futures contracts linked to 5-year and 10-year Treasuries.

Last Thursday, in futures contracts tied to the 10-year Treasury, approximately $5 million of risk exposure per basis point of yield was unwound. In other words, long traders opted to exit positions rapidly in the face of adverse market conditions. The total size of these liquidated contracts roughly equates to the equivalent of selling about $7 billion worth of 10-year Treasuries.

This Tuesday, the bond market came under pressure again due to weakening global demand for long-term government bonds, as investors worried about governments over-relying on long-dated debt financing.

Citigroup strategist David Bieber wrote in a note, "The strong payroll print effectively removed any July cut expectations from the market, and the dip in bond prices is coming from the passive unwind of prior long positioning." He added that US Treasury tactical positioning is still "in overbought territory," and that recently built long positions are incurring losses.

Data released by the Commodity Futures Trading Commission (CFTC) on Monday showed that asset managers' long positions in 5-year and 10-year Treasury futures have sharply increased, now standing at record highs. This week will see auctions for $39 billion of 10-year Treasuries and $22 billion of 30-year Treasuries on Wednesday and Thursday, respectively. Weak demand could further exacerbate passive deleveraging pressure for investors with long duration positions. By contrast, Tuesday's $58 billion 3-year Treasury auction saw a good response.

Uncertainty Dominates the Market

Overall, the current interest rate market is in a phase of heightened uncertainty and divergence. Institutions are adopting long-short hedging strategies across different maturities and instruments, reflecting that uncertainty over the Fed's policy path and macroeconomic data continues to dominate market behavior. In the Treasury cash market, JPMorgan Chase clients are simultaneously increasing both long and short positions, indicating a growing divide in the market. Net long positions rose to their highest level since mid-June, suggesting that some investors are still betting on interest rates having peaked and that bonds have allocation value. But at the same time, short positions also rose to their highest level of the month, reflecting that another group of investors remains wary of the risk of a Treasury correction.

In the SOFR options market, trading is concentrated around uncertainty about the direction of interest rates. On the one hand, large buy orders are betting that the Fed will remain on hold this year, in opposition to the current widely held market expectation of a 50-basis-point rate cut. On the other hand, funds continue to deploy call options, indicating continued confidence in a rate cut path. Risk exposure is primarily focused on put options for September and December, reflecting increased concerns about keeping interest rates high this year. On the US Treasury options side, with the bond market under pressure recently, skew has shifted markedly to the downside, as traders are paying a premium to hedge against the risk of rising interest rates, and risk aversion is escalating. At the same time, funds are still using large call option combinations to bet on a market rebound, indicating that some investors believe the bond market may have entered an oversold phase.

From CFTC positioning data, asset management institutions significantly increased medium- and long-duration Treasury futures such as 10-year notes in the week before the non-farm payroll data, and net long positions reached record highs, reflecting the preemptive behavior of institutions before the shift in expectations. Conversely, hedge funds increased short positions, betting that the bond market would continue to come under pressure.


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Written by
SHARE

Markets

  • Palladium - Cash

    chartpng

    --

    -1.17%
  • EUR/USD

    chartpng

    --

    -0.12%
  • Cotton

    chartpng

    --

    -0.74%
  • AUD/USD

    chartpng

    --

    -0.49%
  • Santander

    chartpng

    --

    0.16%
  • Apple.svg

    Apple

    chartpng

    --

    -0.02%
  • easyJet

    chartpng

    --

    -0.54%
  • VIXX

    chartpng

    --

    -0.28%
  • Silver

    chartpng

    --

    -2.40%
Most Popular ArticlesView all
  • Feb 24, 2025

    Silver price prediction: What will silver be worth in 2025?

Table of Contents
  • 1. US Treasury Yields: Trader Positioning After Strong Jobs Report
  • 2. Uncertainty Dominates the Market

Related Articles

OpenAI's Anticipated ChatGPT 5 Release: System Integration and Enhanced Capabilities

OpenAI is preparing to release ChatGPT 5, a significant update promising user experience improvements, cross-model integration, and enhanced capabilities in coding and content generation. Discover what to expect from this highly anticipated release.

1 day ago

VIX Index Dips Near Lows Amidst Market Optimism: Is Complacency Creeping In?

The Cboe Volatility Index (VIX) dipped to its lowest level since February, reflecting reduced investor anxiety about near-term market volatility, amid mixed outlooks on whether this trend will persist.

1 day ago

PIMCO Warns Against Undermining Fed Independence Amid Trump Criticism

PIMCO cautions that attempts to interfere with the Federal Reserve's independence will destabilize markets, following increased criticism of the Fed chair by Trump.

1 day ago
Markets.com Logo
google playapp storeweb tradertradingView

Contact Us

support@markets.com+12845680155

Markets

  • Forex
  • Shares
  • Commodities
  • Indices
  • Crypto
  • ETFs
  • Bonds

Trading

  • Trading Tools
  • Platform
  • Web Platform
  • App
  • TradingView
  • MT4
  • MT5
  • CFD Trading
  • CFD Asset List
  • Trading Info
  • Trading Conditions
  • Trading Hours
  • Trading Calculators
  • Economic Calendar

Learn

  • News
  • Trading Basics
  • Glossary
  • Webinars
  • Traders' Clinic
  • Education Centre

About

  • Why markets.com
  • Global Offering
  • Our Group
  • Careers
  • FAQs
  • Legal Pack
  • Safety Online
  • Complaints
  • Contact Support
  • Help Centre
  • Sitemap
  • Cookie Disclosure
  • Awards and Media

Promo

  • Gold Festival
  • Crypto Trading
  • marketsClub
  • Welcome Bonus
  • Loyal Bonus
  • Referral Bonus

Partnership

  • Affiliation
  • IB

Follow us on

  • Facebook
  • Instagram
  • Twitter
  • Youtube
  • Linkedin
  • Threads
  • Tiktok

Listed on

  • 2023 Best Trading Platform Middle East - International Business Magazine
  • 2023 Best Trading Conditions Broker - Forexing.com
  • 2023 Most Trusted Forex Broker - Forexing.com
  • 2023 Most Transparent Broker - AllForexBonus.com
  • 2024 Best Broker for Beginners, United Kingdom - Global Brands Magazine
  • 2024 Best MT4 & MT5 Trading Platform Europe - Brands Review Magazine
  • 2024 Top Research and Education Resources Asia - Global Business and Finance Magazine
  • 2024 Leading CFD Broker Africa - Brands Review Magazine
  • 2024 Best Broker For Beginners LATAM - Global Business and Finance Magazine
  • 2024 Best Mobile Trading App MENA - Brands Review Magazine
  • 2024 Best Outstanding Value Brokerage MENA - Global Business and Finance Magazine
  • 2024 Best Broker for Customer Service MENA - Global Business and Finance Magazine
LegalLegal PackCookie DisclosureSafety Online

Payment
Methods

mastercardvisanetellerskrillwire transferzotapay
The www.markets.com/za/ site is operated by Markets South Africa (Pty) Ltd which is a regulated by the FSCA under license no. 46860 and licensed to operate as an Over The Counter Derivatives Provider (ODP) in terms of the Financial Markets Act no.19 of 2012. Markets South Africa (Pty) Ltd is located at BOUNDARY PLACE 18 RIVONIA ROAD, ILLOVO SANDTON, JOHANNESBURG, GAUTENG, 2196, South Africa. 

High Risk Investment Warning: Trading Foreign Exchange (Forex) and Contracts For Difference (CFDs) is highly speculative, carries a high level of risk and is not appropriate for every investor. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please read the full  Risk Disclosure Statement which gives you a more detailed explanation of the risks involved.

For privacy and data protection related complaints please contact us at privacy@markets.com. Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.

Markets.com operates through the following subsidiaries:

Safecap Investments Limited, which is regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license no. 092/08. Safecap is incorporated in the Republic of Cyprus under company number ΗΕ186196.

Markets International Limited is registered  in the Saint Vincent and The Grenadines (“SVG”) under the revised Laws of Saint Vincent and The Grenadines 2009, with registration number  27030 BC 2023.

Close
Close

set cookie

set cookie

We use cookies to do things like offer live chat support and show you content we think you’ll be interested in. If you’re happy with the use of cookies by markets.com, click accept.