(Corrects to read “Speculative long trades” not “short trades” in in paragraph 10)
NEW YORK, June 14 (Reuters) - Speculators turned mildly bearish on U.S. 10-year Treasury note futures ahead of Wednesday’s $21 billion 10-year auction, prompted by nagging worries the Federal Reserve might pare its bond purchases later this year, according to Commodity Futures Trading Commission data released on Friday.
The amount of bearish, or short, positions in 10-year Treasury futures from speculators exceeded bullish, or long, positions by 9,195 contracts on Tuesday, according to the CFTC’s latest Commitments of Traders data.
There were 19,684 more speculative longs in 10-year note futures than shorts a week earlier..
The flip back into bearish positioning in 10-year T-notes came on a volatile trading day when the yield on the 10-year Treasury note rose to a 14-month high of 2.293 percent before retreating to end the day at 2.190 percent after bargain-minded investors emerged.
“This is the fourth reversal in the market’s net positioning in as many weeks, underscoring the recent yield volatility observed in spot markets,” Gennadiy Goldberg, interest rate strategist at TD Securities, wrote in a note.
Goldberg said overall positioning in Treasuries futures turned net short by $4.4 billion, compared with a net long worth $2.2 billion last week.
The 10-year note yield ended lower on Friday at 2.129 percent on bets the Fed will keep short-term interest rates near zero for a protracted period after it stops buying Treasuries and mortgage-backed securities.
The 10-year T-note futures for September delivery finished 18/32 higher on Friday at 129-18/32, the highest level in a week.
Speculators also pared bullish bets on five-year Treasury note futures and turned bearish on 30-year Treasuries futures, according to the latest weekly CFTC Commitments of Traders figures.
Speculative long trades in five-year Treasury note futures exceeded short positions by 94,173 contracts, down 46,756 from the prior week.
Speculators turned net short in 30-year bond futures by 17,718 contracts on Tuesday, compared with a net long total of 2,369 contracts a week earlier.
On the other hand, they reduced their bearish bets on two-year and ultra-long bond futures.
Speculators’ short positions in two-year T-note futures exceeded their longs by 2,133 contracts on Tuesday. A week earlier, they held 33,608 more shorts in two-year T-notes than longs.
The net shorts in ultra-long T-bond futures shrank by 4,839 contracts to 25,745 in the latest week. (Reporting by Richard Leong; editing by Chizu Nomiyama and Leslie Adler)