Short positions still in play for US treasuries

Strategic bond fund managers who have taken high-profile short positions in US government bonds saw some of those moves pay off at the end of June as US treasuries suffered their largest one-week price falls for almost two years. The yield on 10-year US treasuries rose from 2.95% to 3.22% in the week from 27 June to 1 July amid a wider improvement in risk appetite. But while the move was significant, yields remain below the 3.3% level seen at the end of 2010, leaving plenty of room for manoeuvre – and anticipation of a further drop in prices. “If we wriggle towards a diplomatic sol...