Like clockwork this week, as soon as the New York trading session has gotten underway, 30-year Treasuries have jumped.

Despite barely budging during the Asia and London trading sessions -- home to some of the bigger buyers of longer-dated Treasuries -- 30-year yields have dropped an average of five basis points each day this week between 7 a.m. and noon New York time.

One trader in New York, who asked not to be named as he isn’t authorized to speak publicly, said the buying has been dominated by accounts taking off bets against long-maturity debt, as popular so-called steepener trades are pared down.

Positioning for a steeper yield curve, where rates on long-dated debt rise more than those on shorter Treasuries, has been a hot strategy in bond markets in recent months on the expectation the Federal Reserve would take a more relaxed approach on inflation -- something that came to fruition at a virtual Jackson Hole confab on Aug. 27. Yet even as Wall Street strategists reiterated their “steepener” recommendations, 30-year yields have fallen more than 10 basis points to 1.39% Thursday, having risen from 1.22% at the start of April.

Crowded Trades

The disconnect between analyst calls and the price action -- and between domestic and overseas traders -- likely reflects some paring of a crowded trade in the U.S., rather than emerging bets on a flatter yield curve.

The scale of the crowding is evident in the latest data from the Commodity Futures Trading Commission. Net short positions in U.S. long-bond futures from speculative accounts were near the largest since 2006, according to data for the week ended August 25.

The timing of the recent moves has stood out to Citigroup Inc.’s Edward Acton, with the strategist commenting on the recent trend of “real money” purchases in a note to clients Wednesday.

“Treasuries saw a familiar pattern of intraday trading, as a weaker overnight opening faded into the New York open, with the long-end reversing losses and then some on cash buys and aggressive futures block buying,” he wrote.

On Thursday, preliminary data showed a net drop in open interest -- or the amount of outstanding risk -- across Treasury futures following the previous day’s trading activity. Most of the drop was in contracts for 30-year bonds and five-year notes, which are predominately used in tandem for curve wagers, and is consistent with further position unwinds.

This isn’t the first time in recent memory where activity in one region has stood out. Up until Aug. 20, 30-year yields fell during six consecutive Tokyo trading sessions, racking up a nine basis point cumulative decline. However, yields actually rose in total over that period.