Alphadyne Asset Management, a New York-based hedge fund, reportedly lost $1. 5 billion in a short bond market contraction as bets on emerging rates turned bitter, Bloomberg reported.
The losses, which are among the largest publicly disclosed among macro-focused hedge funds, are indicative of the economic environment that has characterized 2021, with inflation figures at their highest point in a decade and benchmark interest rates near 0, and how managers have struggled with such long-standing anomalies.
Bloomberg issues flattening the five- to 30-year yield curves in just 3 days in June, which surprised a lot of people, Alphadyne added. The hedge fund fell 4. 3% to its worst month ever in June when its managers were positioned for a steeper U. S. yield curve and higher interest rates, according to the report.
Hedging budgets have more often reduced bets on Treasury futures as rates continue to hover near record lows despite emerging inflation.