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2025-09-12 21:32:55
[Geopolitical Storm: Oil Spikes Triggering a Huge Fluctuation in US Treasury Yields] ⑴ International oil prices surged 2.0%, breaking through the 20-day moving average, directly leading to a surge in US Treasury yields and a bearish steepening of the yield curve. This volatility stemmed from the UK and EU escalating sanctions against Russia. Heightened geopolitical tensions triggered risk aversion in the market, with traders scrambling to adjust their positions. In particular, after the reopened 30-year Treasury bond auction, previously profitable steepening trades were liquidated en masse. ⑵ Institutional sources indicate that renowned fund manager Pimco, after achieving an 8.3% return on its $200 billion bond fund, is gradually withdrawing from its previously profitable steepening trades, further exacerbating market volatility. On Wednesday, the UK announced new sanctions against Russia, and the EU also planned to introduce its 19th round of sanctions. This not only pushed up oil prices but also caused a surge in long-term UK gilts (Gilts) and European Government Bonds (EGBs), which quickly spread to the US Treasury market. ⑶ From a trading perspective, market expectations for a 75 basis point rate cut by the Federal Reserve this year remain high, leading the money market to price this in. Despite geopolitical and rising energy price pressures, institutional traders and "fast money" investors have capitalized on the narrowing overnight yield curve and actively established new steepening positions, demonstrating a degree of confidence in the future direction of interest rates. However, this confidence is facing a severe test. ⑷ Data shows a significant upward trend across all maturities of the US Treasury yield curve. For example, the 10-year Treasury yield surged 4.6 basis points to 4.057%, while the 30-year Treasury yield also rose 3.2 basis points to 4.683%. The 5-year Treasury yield saw the most significant increase, reaching 3.8 basis points, indicating increased market sensitivity to short-term interest rate fluctuations.
