Long-term bonds face pressure from curve unwinding trades, oil prices rebound amid CTA selling, and supply pressures mount ahead of the seven-year auction

智通财经2026/07/28 18:31

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Overnight, U.S. Treasuries were boosted by the further drop in oil prices and news of Oman proposing a new joint management plan for the Strait of Hormuz, but during the U.S. trading session, long maturities led the decline as crude oil rebounded from its lows, prompting some profit-taking.
Curve flattening trades were unwound en masse ahead of the Federal Reserve meeting. In addition, dealers made room for today’s USD 44 billion 7-year note auction, putting extra supply pressure on the long end.
CTA funds concentrated their selling of 10-year and long-term bonds during Chicago’s open; several large sell orders from hedge funds followed. One notable sale of 5,000 10-year contracts at the 108-20 resistance level further drove prices lower.
Algorithmic trading initiated selling programs at the long end of the curve after 10-year and long-term yields failed to break through the overnight rebound resistance levels of 4.61% and 5.10%, exacerbating the afternoon decline.
Economic data had a limited overall impact: the trade deficit narrowed modestly, retail inventory growth slowed, and the home price index increased slightly. However, none of this changed the bond market’s short-term pricing logic, which remains focused on supply and positioning factors.

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Long-term bonds face pressure from curve unwinding trades, oil prices rebound amid CTA selling, and supply pressures mount ahead of the seven-year auction

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