Speculators turn bearish on US 10-year bond futures

Fri Mar 15, 2013 4:36pm EDT

March 15 (Reuters) - Speculators turned bearish on bets on
U.S. 10-year Treasury futures in the latest week, as
surprisingly strong economic data stoked bids for stocks,
pushing them toward record highs and reducing the appeal of
bonds, according to Commodity Futures Trading Commission data
released on Friday.
    But bond prices remained resilient, as some investors, who
had expected a further decline 10-year Treasury prices this
week, were caught flat-footed. They scrambled to buy bonds on
the open market to exit their short bets, traders and analysts
said.
    The amount of bearish or short positions in 10-year Treasury
futures from speculators exceeded long or bullish positions by
57,346 contracts on Tuesday, according to the CFTC's latest
Commitments of Traders data.  
    A week ago, there were 76,818 more longs in 10-year T-note
futures than shorts. 
    This was first time since early August that there were more
speculative short positions in the 10-year T-notes than long
ones. This weekly net drop in speculative positions was the
largest in almost 14 months.
    The dramatic shift into bearish territory supported a factor
some traders said was behind a surge in incomplete or failed
Treasuries trades this week. This led the U.S. Treasury
Department on Friday to call on institutions holding a large
amount of benchmark Treasury notes to provide information on
their positions following a week in which there was unusual
activity in market. 
    On Friday, June 10-year Treasury futures  
closed 13/32 higher at 130-29/32 after losing about 1-1/2 points
the previous week.
    The yield on cash 10-year Treasury notes 
finished down about 5 basis points at 1.99 percent after rising
to its highest level in 11 months a week ago after a
surprisingly strong report on U.S. hirings in February.  
    The U.S. Labor Department said last Friday that U.S.
employers added 236,000 workers last month, more than 160,000
forecast by economists. The jobless rate unexpected fell to 7.7
percent from 7.9 percent in January.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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