Treasury Investors Ramp Up Bullish Positions Before CPI Data (2)

Investors are leaning into bullish bets on US Treasuries ahead of this week’s inflation report, as a recent run of softer-than-expected data opens the door for the Federal Reserve to cut interest rates in September and further ease monetary policy in the months ahead.

The market’s dovish stance has been reflected in open interest, or the amount of new risk held by traders: Some 70,000 contracts were added in October fed funds futures following Friday’s lackluster employment report, the largest daily increase on record for that month.

In SOFR options, which closely track the Fed’s policy path, a ...