In the tide of global asset selling triggered by the escalation of global trade conflicts, even the "ultimate safe haven asset" of US treasury bond bonds was not spared. The yield of 10-year US Treasury bonds soared to 4.46% at one point, with a daily increase of 20 basis points in Asian trading, nearly 60 basis points higher than the beginning of this week, setting a rare three-day record of significant volatility since 1981.

ANZ senior interest rate strategist Jack Chambers pointed out, "This is no longer about fundamentals, the market is now concerned about liquidity

Hedge funds are facing "financing pressure", triggering a wave of forced liquidation. One of the core causes of the severe turbulence in the US Treasury market this time is that hedge funds, which heavily use leveraged "basis trading," have been forced to reduce their positions.

When lenders, mainly investment banks' Prime Brokers, increase margin requirements or even stop financing, funds can only sell cash bonds to meet liquidity needs, causing yields to rapidly rise.

Mukesh Dave, Chief Investment Officer of Aravali Asset Management in Singapore, said, "Once the financing chain tightens, funds must be forced to sell, which accelerates the collapse of the bond market

Under conventional market logic, an increase in US bond yields should be accompanied by a rise in expectations of interest rate hikes, but currently the opposite is true - the market's bet on the Fed's June rate cut is actually heating up. This indicates that the current market has entered an 'irrational panic stage', with investors selling everything in exchange for cash.

At the same time, the US dollar index fell below the 103 level, and the euro and yen strengthened relatively, indicating that the safe haven logic is being redefined. The 'ultimate safe haven' status of US Treasury bonds is being questioned.

Ben Wiltshire, G10 interest rate strategist at Citigroup, said: "The current US bond sell-off may indicate that a new market system is being established - US treasury bond bonds are no longer the 'axis' of the global fixed income market."

10-year yield: Breaking through 4.46%, if it further rises to 4.50%, it may trigger systematic capital flight, and bond funds may face a wave of redemption.

30-year yield: If it continues to remain above 5%, it will break the long-term interest rate ceiling since the 1980s and trigger institutional reallocation risk.

Abnormal interest margin: The Treasury swap spread of US treasury bond bonds narrowed rapidly, indicating that liquidity was seriously damaged.

Misalignment between futures and present: significant losses in basis trading, increased market distortion, and the volatility of the US Treasury market may continue to expand in the next two weeks.

Editor's viewpoint:

The current US Treasury market is not just about price fluctuations, but a crisis of faith based on credit, liquidity, and hedging functions. The escalation of global trade conflicts is impacting the global capital structure, forcing investors to reassess the definition of 'safe assets'.

If trade tensions continue, the US bond market will still face systemic selling pressure, and may even force the Federal Reserve to take emergency measures to intervene.