May 10, 2019 / 8:41 PM / 10 days ago

UPDATE 1-Speculative U.S. 10-year T-note net shorts hit highest since Dec -CFTC

    * Speculators' Eurodollar net longs highest since Oct. 2015
    * U.S. 10-year yields hit 5-week lows on trade worries
    * U.S. Treasury yields rise after poor 10-year note auction

 (Adds details, background)
    May 10 (Reuters) - Speculators' net bearish bets on U.S.
10-year Treasury note futures rose earlier this week to their
highest level since mid-December, according to Commodity Futures
Trading Commission data released on Friday.
    They increased their bearish, or short, bets ahead of a $27
billion 10-year note auction, a part of this week's $84 billion
quarterly refunding and two-day trade talks between China and
the United States.
    The amount of speculators' short positions in 10-year
Treasury futures exceeded bullish, or long, positions by 330,562
contracts on May 10, according to the CFTC's latest Commitments
of Traders data.
    A week earlier, speculators held 287,921 net short positions
in 10-year T-note futures.
    Benchmark 10-year Treasury yields fell to a
five-week low at 2.424% on Thursday as investors piled into
low-risk government debt on renewed trade tension between
Beijing and Washington.
    U.S. and Chinese negotiators produced no trade deal, but
said their talks went well enough to warrant further
discussions.
    Bond yields spiked on Wednesday following a dismal 10-year
note sale, which had stoked speculation that China pared its
bidding for the new supply in retaliation for Trump's new round
of tariffs on $200 billion of Chinese imports which went into
effect on Friday.
    Meanwhile, speculators raised their net bullish bets on
Eurodollar futures to 405,760 contracts, the highest level since
Oct. 15, 2015 amid expectations the Federal Reserve might lower
key lending rates by year-end to prolong the current economic
expansion.
    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) 
        07 May 2019       Prior week
        week           
 Long       1,120,368      1,104,459
 Short      1,188,257      1,151,956
 Net          -67,889        -47,497
 
U.S. 5-year T-notes (Contracts of $100,000) 
        07 May 2019       Prior week
        week           
 Long         807,239        885,752
 Short        940,000        992,628
 Net         -132,761       -106,876
 
U.S. 10-year T-notes (Contracts of $100,000) 
        07 May 2019       Prior week
        week           
 Long         577,607        589,086
 Short        908,169        877,007
 Net         -330,562       -287,921
 
U.S. T-bonds (Contracts of $100,000) 
        07 May 2019       Prior week
        week           
 Long         152,449        139,904
 Short        187,474        177,975
 Net          -35,025        -38,071
 
U.S. Ultra T-bonds (Contracts of $100,000) 
        07 May 2019       Prior week
        week           
 Long         102,716         98,362
 Short        416,863        422,242
 Net         -314,147       -323,880
 Eurodollar (Contracts of $1,000,000) 
        07 May 2019       Prior week
        week           
 Long       1,751,238      1,709,971
 Short      1,345,478      1,407,761
 Net          405,760        302,210
 Fed funds (Contracts of $1,000,000) 
        07 May 2019       Prior week
        week           
 Long         134,291        210,294
 Short        290,015        432,331
 Net         -155,724       -222,037
 
 (Reporting by Richard Leong; Editing by Cynthia Osterman and
Susan Thomas)
  
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