Traders increase bets on continued stability in US Treasuries, expect yields to fluctuate within a narrow range in the coming weeks

After a key indicator of U.S. Treasury volatility fell back to pre-war levels, traders continued to make large-scale moves, betting that the market will remain stable for an extended period in the coming weeks and keep U.S. Treasury yields fluctuating within a narrow range. So far this month, the trading range of the U.S. 10-year Treasury yield has been only 16 basis points. The two-week ceasefire agreement between the U.S. and Iran, which was originally set to expire on Wednesday, has helped oil prices retreat from multi-year highs. The rising popularity of short volatility strategies is also reflected in the increasing demand for so-called straddle and strangle short positions on the U.S. 10-year Treasury.