Biggest Futures Trade on Record Notched in SOFR Market

Bloomberg09-26

(Bloomberg) -- A massive trade was made in the short-term interest rates market Wednesday. If not an outright bet to fade the amount of Federal Reserve easing priced for this year, the transaction ...

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The block trade was linked to the Secured Overnight Financing Rate, where performance is closely attuned to the immediate path of the Federal Reserve’s monetary policy.Swaps traders are speculating there will be around three-quarters of a percentage point of additional easing in 2024, ahead of policymakers’ stated target of an additional half a percentage point of interest-rate cuts.CME Group Inc. confirmed the block is the largest yet for the product. Block trades are privately negotiated single-price transactions often used by institutional invest","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","LU0795875169.SGD":"JPMorgan Investment Funds - Global Income A (div) SGD-H","BK4561":"索罗斯持仓","LU0731783394.SGD":"Fidelity Global Dividend A-MINCOME(G)-SGD","LU1599440770.SGD":"FIDELITY GLOBAL DIVIDEND \"A\" (SGDHDG) INC","LU1732799900.SGD":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","BK4112":"金融交易所和数据","LU0912757837.SGD":"JPMorgan Investment Funds - Global Income A (mth) SGD-H","LU2023251221.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"AM\" (USD) INC","LU1732800096.USD":"摩根大通环球收益基金A (irc)","LU2089284900.SGD":"Allianz Global Sustainability Cl AM Dis H2-SGD","BK4585":"ETF&股票定投概念","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","BK4566":"资本集团","IE00B3T34201.USD":"BNY MELLON GLOBAL EQUITY INCOME \"B\" (USD) INC","CME":"芝加哥商品交易所","LU2347655156.SGD":"JPMorgan Investment Funds - Global Income A (icdiv) SGD-H","LU0795875086.SGD":"JPMorgan Investment Funds - Global Income A (div) SGD","BK4588":"碎股","LU2089283258.USD":"安联环球可持续基金Cl AM Dis","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD"},"translate_title":"SOFR市场创下有记录以来最大的期货交易","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CME":0.9},"content_text":"(Bloomberg) -- A massive trade was made in the short-term interest rates market Wednesday. \nIf not an outright bet to fade the amount of Federal Reserve easing priced for this year, the transaction appeared to be an investor taking profits and unwinding their long position as the contract traded close to its yearly highs.\nSome 118,000 contracts changed hands at 9:38 a.m. New York time in the futures market — it was the largest such transaction on record. The block trade was linked to the Secured Overnight Financing Rate, where performance is closely attuned to the immediate path of the Federal Reserve’s monetary policy. \nSwaps traders are speculating there will be around three-quarters of a percentage point of additional easing in 2024, ahead of policymakers’ stated target of an additional half a percentage point of interest-rate cuts.\nCME Group Inc. confirmed the block is the largest yet for the product. Block trades are privately negotiated single-price transactions often used by institutional investors who prioritize size over price sensitivity.\nThe amount beats a 75,000 trade seen back in April, a buyer in the same December 2024 SOFR futures contract. Trading in many of these contracts is anonymous, which makes it difficult to identify the firms behind those bets.\nShortly after the block trade, the underlying December 2024 SOFR price dropped sharply, suggesting the trade was seller-initiated. Two-year yields — which have been hovering around 2022 lows recently — quickly reversed and pushed to the day’s highs.\nAt the start of September, there was a heavy amount of buying seen around 20 ticks lower than Wednesday’s price.\nAt a size of 118,000 futures contracts, the bet equates to a risk weighting of about $3 million per basis point move. A 20-tick move higher on a trade that size would equate to $60 million of profits. CME open interest data, released in the early Asia session should provide more clues on the motivation behind Wednesday’s record wager. \n(Updates headline, paragraph ordering.)\n©2024 Bloomberg L.P.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470290215"}