Treasury Rally Was So Intense CME Halted 30-Year Futures Trading

(Bloomberg) -- The Treasuries rally Friday was so ferocious amid coronavirus fear that CME Group Inc. repeatedly halted futures on 30-year bonds.

The surge in Ultra U.S. Treasury Bond contracts four times triggered CME circuit breakers designed to ensure prices on its exchanges don’t spiral out of control. The futures, which debuted in 2010 and reference a Treasury security with at least 25 years left to maturity, rose as much as 14 1/2 points as the benchmark 30-year yield tumbled nearly 34 basis points to a record low 1.204%.

CME halts trading in most Treasury futures contracts in the event of large price changes, except during critical windows near their expiration dates.

The pause was first activated Friday when the June contract rose 3 points, then repeated at 6, 9 and 12 points. The last time circuit breakers were triggered for the product was on Feb. 24, when the Ultra Bond contract rose more than 3 points, CME spokesman Chris Grams said. According to Bloomberg data, the contract has gained more than 6 points in a day only one other time, on June 24, 2016, after the U.K. Brexit vote, and has never fallen that much.

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net

To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark Tannenbaum, Nick Baker

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