Forced unwind is intensifying across long-dated US Treasuries: Asset managers cut bullish positions in ultra-long Treasury futures by $27 million per basis point of interest-rate risk in the 2 weeks ending October 6th. This is equivalent to ~$38 billion in current 10-year Treasury notes. Meanwhile, 30-year Treasury yields surged to a 24-year high of 5.72% last week, as futures prices fell sharply amid persistent inflation concerns, worsening government finances and massive AI-related investment. Open interest in ultra-long Treasury futures has declined for 7 consecutive sessions, shedding nearly $20 million per basis point of risk, providing further evidence of investors unwinding positions. The unwind is driven by rising yields and technical factors in Treasury futures. When the cheapest bond eligible for delivery under a Treasury futures contract shifts to a longer-maturity bond, asset managers can end up with greater interest-rate exposure than intended, forcing them to sell futures to reduce that risk. Rising yields are triggering further investor deleveraging, adding to the pressure on the world's largest bond market.

Physical oil prices have reached UNPRECEDENTED levels as the global scramble for crude intensifies: Dated Brent, the price of physical crude for near-term delivery, surged above $154 per barrel on October 5th, the highest level in LSEG data going back to 1991, and remained above $149 last Friday. In effect, the spread between physical Brent and benchmark Brent futures has widened to a record of more than $50 per barrel, highlighting the growing premium buyers are willing to pay to secure immediate supply. Normally, longer-dated crude futures trade at higher prices because of storage costs and other factors, but the current supply squeeze has reversed this pattern, making near-term oil more expensive than future deliveries. The squeeze is intensifying as crude inventories shrink, tanker availability remains low, and shipping through the Strait of Hormuz remains dangerous, with winter approaching and demand for heating fuels rising. At the same time, Brent futures have risen far less than physical prices, reflecting expectations that oil flows through the Strait will eventually recover. Meanwhile, intensified Iranian attacks are making these shipments increasingly difficult to secure, while rerouting cargoes and securing tankers add further costs and delays. The global oil market is facing a historic supply squeeze.