May 19, 2017 / 8:45 PM / 8 months ago

Speculators set for big payday in U.S. bond market: CFTC data

(Reuters) - Some speculators set up for a handsome payoff ahead of a U.S. bond market rally on Wednesday as they collectively built their net bullish bets on 10-year Treasury futures to the highest levels since the end of 2007.

The number of speculators’ bullish, or long, positions in 10-year Treasury futures exceeded bearish, or short, positions by 240,010 contracts on Tuesday, according to Commodity Futures Trading Commission data released on Friday.

That was the highest level of speculative net longs in 10-year T-note futures since 248,426 contracts on Dec. 25, 2007, CFTC’s latest Commitments of Traders data showed. 1043602NNET.

A day later, Treasury prices jumped as traders piled into safe-haven government bonds in the cash and futures markets on jitters that probes into U.S. President Donald Trump’s 2016 campaign’s possible ties with Russia could delay or even derail his plans for major tax cuts and infrastructure spending.

The June 10-year Treasury note contract TYcv1 settled 28/32 higher on Wednesday, which was its biggest one-day price gain since June 2016.

Speculators who were short 10-year T-notes “were well positioned for the rally,” said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

A week earlier, speculators held 229,119 net long positions in 10-year T-note futures 1CFTC11.

Among other bond and interest rates contracts, speculators raised their net shorts in five-year T-notes to 170,167 contracts, the most since April 11.

Speculators, on the other hand, pared their net shorts in Eurodollar futures to 2.69 million contracts, the fewest net shorts since March 5.

Reporting by Richard Leong; Editing by G Crosse and Meredith Mazzilli

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