Trend Funds Short Global Bonds, CPI Report Becomes Key to Profit and Loss

UBS Group data shows that commodity trading advisors (CTAs) doubled their underweight positions in bonds in July compared to two weeks earlier. These bets remain stable, and if the upcoming U.S. consumer and producer price indices stimulate a rise in Treasury prices, CTA trades will face a risk of loss. Strategist Nicolas Le Roux pointed out that before the inflation data is released, for every 1 basis point change in the 10-year Treasury yield, the profit and loss scale for CTAs is approximately $300 million, with exposure being the largest since UBS began compiling related data in 1990.

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