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Will Convexity Hedgers Unleash The Next Round Of Treasury Selling

Earlier, we noted that with spec Treasury net shorts hitting an all time high in both the 2Y and ultra-long futures... ... just as the long-running correlation between equities and yields finally snapped this week as higher yields are now seen as a risk to stocks.. ... traders are increasingly worried, after the worst week for stocks since Jan 2016, what further Treasury selling could mean for equities as a result of a potential violent deleveraging of risk-parity strategies, which will be forced to significantly reduce their gross exposure following last week's drubbing.
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