* Speculators pare bearish bets before July Fed minutes
* Net shorts in 10-year T-notes retreat from one-year high
* Speculative 5-year net longs lowest since January
Aug 23 Speculators reduced bearish bets on U.S.
10-year Treasury note futures in the latest week before the
Federal Reserve released the minutes of its July policy meeting,
according to Commodity Futures Trading Commission data released
The amount of bearish, or short, positions in 10-year
Treasury futures from speculators exceeded bullish, or long,
positions by 41,592 contracts on Aug. 20, according to the
CFTC's latest Commitments of Traders data.
A week ago, speculators held 66,432 net short positions in
10-year T-note futures, which was the highest weekly
reading of net speculative shorts in 10-year Treasury note
futures since late July 2012.
Prior to the release of the Fed minutes on Wednesday, some
traders had hoped that the minutes would support the view that
the central bank is not prepared to shrink its bond purchase
program, known as QE3, as early as September.
However, the record on last month's policy meeting did
little to dispel the notion the Fed is on track to dial back in
its current $85 billion monthly bond purchases, as policymakers
acknowledged the U.S. economy is expanding at a moderate pace.
Bond yields rose in reaction to the minutes and they
subsequently hit two-year highs early Thursday before they
rallied on Friday on a dismal July new home sales report.
Treasury 10-year T-note futures on the Chicago Board of
Trade for September delivery closed up 21/32 on the day
at 124-29/32, while the yield on cash 10-year Treasury notes
fell 7.6 basis points to 2.816 percent, which was
below its two-year high of 2.936 percent set on Thursday.
Speculators built up their long positions in longer-dated
Treasury futures in the latest week, according to the latest
weekly CFTC Commitments of Traders figures.
Speculators turned net long in 30-year bond futures
for the first time since the beginning of the year. They had a
net long by 15,934 contracts on Tuesday, which was the highest
level of net longs since late April. This compared with a net
short of 1,788 a week ago.
Speculators added to their net long in ultra-long T-bond
futures in the latest week. Long trades exceeded short ones by
6,822 contracts on Tuesday, which was the highest net long level
since Oct. 9, 2012, and up from 5,026 contracts a week earlier.
Speculators' long positions in two-year T-note futures
exceeded shorts by 50,372 contracts on Tuesday, little
changed from the 50,518 contracts last week..
On the other hand, speculative net longs in five-year
Treasury note futures fell to 9,080 contracts, down
33,328 from the previous week. The latest figure was the lowest
level of net longs in five-year T-notes since mid-January, when
speculators had a net short..