April 5, 2013 / 8:41 PM / in 5 years

UPDATE 1-Speculators up US 10-year note bets before payrolls-CFTC

NEW YORK, April 5 (Reuters) - Speculators raised their net bullish bets on U.S. 10-year Treasury note futures in the latest week as disappointing data before the March payrolls report raised concerns about a slowing economy, according to Commodity Futures Trading Commission data released on Friday.

The amount of bullish, or long, positions in 10-year Treasury futures from speculators exceeded bearish or short positions by 110,692 contracts on April 2, according to the CFTC’s latest Commitments of Traders data.

A week ago, there were 98,190 more longs in 10-year note futures than shorts.

Traders ratcheted up their bullish view on Treasuries on Monday after the Institute for Supply Management said its index on manufacturing activity fell to its lowest in three months, feeding doubts the economy is gaining steam.

Then a steady stream of downbeat data followed the ISM factory report, punctuated by the government’s payroll report that showed only a 88,000 gain in U.S. payrolls, less than half of what Wall Street expected.

Worries about another spring U.S. slowdown, in addition to Bank of Japan’s plan for $1.4 trillion in stimulus, led traders to scramble for safe haven Treasuries on Thursday and Friday, sending benchmark yields to new lows for the year.

On Friday, June 10-year Treasury futures closed 6/32 higher at 133-1/32, while the cash 10-year Treasury notes ended up 17/32 to yield 1.708 percent, down 5.8 basis points from late on Thursday.

The 30-year Treasury bond was the day’s strongest performer, rising 2-12/32 points to yield 2.874 percent, down 11.7 basis points from Thursday’s close.

Speculators also raised their bullish bets on medium-dated Treasuries futures or pared bearish bets on long-dated bond futures, according to the latest CFTC data.

Speculative long trades in five-year Treasury note futures exceeded short positions by 157,564 contracts, more than prior week’s 127,251.

Speculators reduced their net short positions in 30-year bond futures to 8,416 contracts on Tuesday from 11,238 a week ago, the latest Commitment of Traders data showed .

The net shorts in “ultra” long T-bond futures contracted to 22,569 in the latest week from previous week’s 25,466 .

The only exception to speculators’ bullish move in Treasuries futures was the two-year T-note contracts.

Speculative long positions in two-year T-note futures fell by 29,665 contracts to 121,941 on Tuesday.

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