Big Treasury Block Sales Drive ‘Capitulation’ Selloff in Bonds

A series of large sales in US Treasury futures exacerbated a selloff in the $31 trillion government debt market, as concern about resurgent inflation pushed investors to price in higher interest rates.

As long-end yields soared to their highest level since 2007 on Tuesday, a wave of block sales in both 5- and 10-year note futures added to the pressure. The futures transactions — which came during a manic hour of trading in the US morning session — were equivalent to roughly $15 billion of the current cash 10-year note, according to data compiled by Bloomberg.

It was a “capitulation-type ...