NEW YORK, Nov 16 Bond speculators raised bullish
bets on U.S. Treasury futures early this week on anxiety that
Washington will fail to reach a timely deal to avert a fiscal
crisis, according to Commodity Futures Trading Commission data
released on Friday.
Investors fear the "fiscal cliff," a series of automatic tax
hikes and spending cuts which would phase in from early 2013 if
U.S. President Barack Obama and Congressional leaders do not
reach a compromise by year-end.
Going over the fiscal cliff could stun the U.S. economy back
into recession, according to many economists.
Speculators' net long positions in 10-year Treasury futures
increased to 158,519 contracts on Nov 13 from 110,357 last week,
according to the CFTC's latest Commitments of Traders data.
On Friday, 10-year Treasury futures closed 3/32 higher at
134-4/32, while the yield on cash 10-year Treasury notes
finished down 1 basis point at 1.58 percent.
Ten-year note futures touched their highest level since
early September, while the 10-year cash yield fell to its lowest
since early September.
In the meantime, speculators raised their bullish or long
bets in two-, five- and 30-year Treasury futures.
There were 16,912 more speculative long positions in 30-year
Treasury bond futures versus bearish or short positions on
Tuesday. A week earlier, there were 22,654 more speculative
shorts in T-bond futures than longs.
Net speculative long bets on two-year T-notes inched up to
4,875 contracts from 4,145 last week.
Net speculative long bets on five-year T-note futures jumped
to 118,837 contracts from 72,858 the prior week, the data
Bond speculators remained bearish on the Chicago Board of
Trade's "ultra" bond contracts, as worries about a protracted
struggle to attain a long-term budget deficit plan made holding
very long-term debt unappealing.
There were 28,160 more speculative short positions than
longs in the "ultra" contracts on Tuesday, compared with 19,802
net shorts a week ago, the data showed.