Ultima Markets | USNOTE10Y Analysis: Basis trading “bloodbaths” US Treasury longs

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USNOTE10Y for April 9, 2025.

Fundamental Analysis of USNOTE10YUSNOTE10Y Key Takeaways

• De-leveraging of US Treasury basis trading: Basis trading strategies usually use a lot of leverage to earn the price difference between Treasury spot and its related futures, and are currently being quickly closed. Investors want cash more in the tariff panic. At the current rate of decline of US 10-year bonds, the Federal Reserve needs to inject $18 trillion before Thursday, otherwise there is a probability of default on US Treasury bonds.
• Shortage of liquidity in the bond market: The yield on 10-year US Treasury bonds soared 50 basis points in two days, and market liquidity was seriously lacking. Funds and asset managers have sold US Treasury bonds for cash, and carry trades have been closed on a large scale, but the current market liquidity is not enough to close all positions.
• The Fed has a chance to take action: Multi-trillion-level basis trading is detonating, the market is bleeding heavily, and the Fed may have no choice – not taking action may cause the entire financial system to collapse together.

Technical Analysis of USNOTE10Y Daily and Hourly Charts

USNOTE10Y Daily Chart Insights

(USNOTE10Y Daily Price Chart, Source: Ultima Markets MT5)

• Stochastic oscillator: After the indicator and the exchange rate diverge, it enters the overbought area to send a short signal, suggesting that the short-term decline is the main focus, and short opportunities should be given priority.
• Support price: The price of 10-year US Treasury bonds fell rapidly and is about to fall below the green 200-day and black 65-day key moving average support. There is an oversold sentiment during the day, and be alert to the risk of rebound during the Asian session.

USNOTE10Y 1-hour Chart Analysis

(USNOTE10Y H1 Price Chart, Source: Ultima Markets MT5)

• Stochastic oscillator: The indicator entered the oversold range during the Asian session, and the short-term oversold sentiment is strong, and there is a probability of rebound adjustment.
• Rebound price: The price of 10-year US Treasury bonds will first look at the downward trend line. If the market price continues to break upward, there is a probability of an intraday reversal, although this probability is small.

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Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.