December 22, 2017 / 9:29 PM / a year ago

UPDATE 1-Speculators turn net short in U.S. 10-year T-notes -CFTC

    * U.S. longer-dated yields jump as tax overhaul becomes law
    * Speculative net longs in 30-year T-bonds hit record high

 (Adds background on latest data)
    Dec 22 (Reuters) - Speculators held more bearish bets in
U.S. 10-year Treasury note futures than bullish ones earlier
this week, marking the first time this has happened since
mid-April, according to Commodity Futures Trading Commission
data released on Friday.
    The amount of speculators' bearish, or short, positions in
10-year Treasury futures exceeded bullish, or long, positions by
44,230 contracts on Dec. 19, according to the CFTC's latest
Commitments of Traders data.
    A week earlier, speculators held 44,741 net long positions
in 10-year T-note futures.
    The shift in 10-year T-note positioning coincided with a
steepening of the yield curve this week as traders exited their
curve flattener holdings by selling long-dated Treasuries and
buying short-dated issues.
    Congressional approval of the biggest overhaul of the U.S.
tax code in 30 years this week was seen as the catalyst of the
curve steepening move, traders and analysts said.
    The Republican tax plan, which President Donald Trump signed
into law on Friday, could boost the economy, according to some
forecasts, while adding roughly $1.5 trillion to the national
debt in 10 years. The outlook for higher growth and debt has
made holding longer-dated bonds less appealing.
    In the cash market, 10-year Treasury yield
reached a nine-month peak at 2.504 percent on Thursday. 
    Meanwhile, speculative net shorts in two-year T-notes grew
modestly to 178,628 contracts on Tuesday, while speculative net
longs in 30-year T-bonds reached a record high of 104,347
    Below is a table of the speculative positions in Treasury
futures on the Chicago Board of Trade and in Eurodollar futures
on the Chicago Mercantile Exchange in the latest week:
 U.S. 2-year T-notes (Contracts of $200,000) 
        19 Dec 2017       Prior week
 Long         404,609        407,705
 Short        583,237        578,145
 Net         -178,628       -170,440
U.S. 5-year T-notes (Contracts of $100,000) 
        19 Dec 2017       Prior week
 Long         568,836        563,573
 Short        946,783        888,570
 Net         -377,947       -324,997
U.S. 10-year T-notes (Contracts of $100,000) 
        19 Dec 2017       Prior week
 Long         685,295        791,302
 Short        729,525        746,561
 Net          -44,230         44,741
U.S. T-bonds (Contracts of $100,000) 
        19 Dec 2017       Prior week
 Long         202,900        207,452
 Short         98,553        106,542
 Net          104,347        100,910
U.S. Ultra T-bonds (Contracts of $100,000) 
        19 Dec 2017       Prior week
 Long          59,806         54,091
 Short        166,179        160,617
 Net         -106,373       -106,526
 Eurodollar (Contracts of $1,000,000) 
        19 Dec 2017       Prior week
 Long         957,890        976,681
 Short      3,380,920      3,438,917
 Net       -2,423,030     -2,462,236
 Fed funds (Contracts of $1,000,000) 
        19 Dec 2017       Prior week
 Long         116,921        106,008
 Short        191,891        192,788
 Net          -74,970        -86,780
 (Reporting by Richard Leong; Editing by James Dalgleish and Tom
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