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Treasury Yields Take Flight, Setting Up Big Shorts for Rewards

(Bloomberg) Liftoff may finally have arrived for yields in the world’s biggest debt market. That’s good news for the fast-money crowd that’s rarely been more bearishly positioned on 10-year Treasury futures. Yields on all maturities have taken flight this week, with longer-dated rates leading the charge higher. That’s despite recent warnings by DoubleLine Capital’s Jeffrey Gundlach that a “massive increase” in short positions against 10-year and 30-year Treasury markets could spur a short squeeze. The yield on the benchmark 10-year note has surged firmly above the much-watched 3 percent mark, trading steady at 3.06 percent in Asia on Thursday after the highest U.S. close in four months. The most recent moves have reversed a small part of the relentless curve flattening that’s been seen this year, pushing some yield gaps to the widest levels in more than a month.

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