Multiple large futures transactions smashed the market, and the U.S. Treasury market "surrendered" without a fight.

A series of large sell orders on US Treasury futures exacerbated the downtrend in the government bond market, which has a scale of $31 trillion. Concerned about a resurgence of inflation, investors are starting to factor in higher rate expectations. The long-term US bond yield rose to its highest level since 2007 on Tuesday, and the large sell-off of 5-year and 10-year Treasury futures made matters worse for the market. According to compiled data, these futures transactions occurred during a hectic hour of trading in the US morning session, with a trading volume equivalent to $15 billion of current 10-year Treasury notes. "The US Treasury market experienced a typical capitulation trading day," said Alan Taylor, founding partner of Archr LLP, attributing the sell-off to "several large sell orders." This sell-off once again demonstrates that the surge in energy prices caused by the war has intensified inflation concerns, prompting the market to bet that central banks, including the Fed, will need to raise interest rates. Futures pricing on Tuesday indicated an 85% probability of a rate hike by the end of the year, compared to no expectations for a rate hike on May 1st.