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Option traders position for higher treasury yields

According to Reuters, the average one-month put-call ratio on the iShares 20+ Year Treasury Bond ETF has risen to its highest level since the beginning of the year. 

It is reflective of growing confidence among traders that the nascent US economic recovery and rising hopes for coronavirus vaccine would lift treasury yields higher. 

The investment banking giant Goldman Sachs recently revised its US third-quarter gross domestic product forecast higher to 35% from 30%. Further, the Federal Reserve said on Wednesday that now sees a full-year GDP decline of 3.7% – considerably better than the 6.5% drop forecast in June.

The 10-year Treasury yield rose by five basis points to 0.7% following the Fed's rate decision and currently hovers near 0.68%. 

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