Business Maverick

Business Maverick

Hedge Funds Kicked Off 2021 With $49 Billion Sale of Treasuries

A pedestrian wearing a protect mask carries CVS Health Corp. shopping bags while walking in the Upper West Side neighborhood of New York, on Wednesday, 23 September 2020. (Photo: Mark Abramson/Bloomberg

Hedge funds offloaded the most Treasuries in nine months in January, foreshadowing a selloff in U.S. bonds that occurred just weeks later.

The Cayman Islands, seen as a proxy for hedge funds and other leveraged accounts, dumped $49 billion of U.S. sovereign bonds, making it the largest net seller of the debt that month, according to the latest data from the Treasury Department.

The selling came on the back of the Democratic victories in the January 5 Georgia run-off race which paved the way for bumper stimulus spending to revive the U.S. economy. Bets for growth and inflation to quicken have since gained traction, fueling a jump in Treasury yields to the highest in over a year.

Blue wave sparked a wave of hedge fund selling

Benchmark U.S. yields rose 15 basis points in January to break the 1% level for the first time in over nine months. The data, released on Monday, suggest hedge funds were well positioned for what was to follow, as yields surged another 34 basis points in February.

Hedge Fund Research Inc.’s Macro Total Index, which tracks discretionary macro managers among others, climbed 0.2% in January, before clocking up a 2.8% gain in February.

Gallery

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider

Every seed of hope will one day sprout.

South African citizens throughout the country are standing up for our human rights. Stay informed, connected and inspired by our weekly FREE Maverick Citizen newsletter.