Traders Target Bond Market Rally on Iran War ‘Tone Change’

Optimism about a possible peace deal in the Middle East and lower oil prices has bond traders positioning for gains in Treasuries that could send 10-year yields sliding toward 4%.

One sizable position in the options market is targeting US 10-year yields at 4.18% within three weeks, down from 4.25% currently. Another is set up for an even deeper bond rally to 4.1%, a level not seen since March 10.