The Tell: Deutsche Bank sees risk in rapid unwinding of leveraged Treasury trades


Hedge funds’ growing use of leveraged positions in the $25.1 trillion Treasury market is back in the spotlight again, this time with one major Wall Street firm warning of what might happen if those trades are rapidly unwound.In a note released on Tuesday, strategist Steven Zeng of Deutsche Bank DB said such a scenario would essentially lead to a repeat of the Treasury market volatility that occurred in March 2020 and is something that the Federal Reserve “wants to avoid.”

The basis trade is an arbitrage maneuver that involves…

This article was originally published by Read the original article here.

Previous articleDow Jones Newswires: Australia’s economic growth slows by less than expected, but risks are building
Next articleSaudi Telecom takes nearly 10% stake in Spain’s Telefonica


Please enter your comment!
Please enter your name here