NEW YORK, Feb. 29 (UPI) -- Huge waves of U.S. treasury futures trades Wednesday morning had traders speculating a typo or a computer glitch was the cause of it all.
"It's very possible it was a fat finger, but it seems more like a very big asset allocation," said an interest-rate trader in Chicago.
A "fat finger" refers, basically, to an electronic typo that can change 8,000 to 80,000 in a careless moment.
That said, sales of about 80,000 treasury futures dated for June swept through the system in about 2 minutes just after 10 a.m., The Wall Street Journal reported.
Traders said that sales of 47,000 additional bond futures and 52,000 futures on five-year notes were part of the anomaly.
But a second theory circulating around Wall Street had to do with Federal Reserve Chairman Ben Bernanke's remarks in Washington at a hearing of the House Financial Services Committee.
"There had been some expectations built in that he [Bernanke] was going discuss [a new round of quantitative easing] … and it did not happen," said Andres De Lasa, managing director and senior government bond trader at Pierpont Securities.
That meant it was simply time to sell.
But the rush of selling rippled through the market. Yields on 10-year benchmark treasury notes jumped from 1.94 percent to 2.01 percent at the start of Bernanke's testimony. The euro and the Australian dollar both fell relative to the U.S. dollar, hitting to $1.3345 and $1.0756, respectively.
