November 16, 2012 / 9:01 PM / in 5 years

Speculators raise bullish bets on US bond futures-CFTC

NEW YORK, Nov 16 (Reuters) - 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.
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