Bond Traders Hedge Against More Losses as Inflation Data Looms

Investors in the $31 trillion Treasury market are going into a closely-watched report on consumer prices hedging against more losses in government bonds, as a fragile truce between the US and Iran takes hold.

Traders beefed up options hedges targeting higher yields on 5-and 10-year Treasuries on Thursday, as they continued recalibrating portfolios for a feared inflationary rebound spurred by last month’s oil price surge. Data from a JPMorgan Chase & Co. investor survey released on Tuesday showed net long positions in the cash market at their least bullish in three weeks.