May 18, 2018 / 8:12 PM / 3 months ago

UPDATE 1-Speculators cut bearish bond bets as 10-year yield hit 7-year high

    * Speculative 2-year T-note net shorts lowest in nearly a
year
    * Speculators' net shorts in ultra bonds hit record high
    * Speculative Eurodollar net shorts post biggest drop in 11
months

 (Adds details, background)
    May 18 (Reuters) - Speculators' net bearish bets on U.S.
10-year Treasury note futures fell to a one-month low earlier
this week, as the 10-year yield began setting a series of
seven-year highs, according to Commodity Futures Trading
Commission data released on Friday.
    The amount of speculators' bearish, or short, positions in
10-year Treasury futures exceeded bullish, or long, positions by
381,922 contracts on May 15, according to the CFTC's latest
Commitments of Traders data.
    A week earlier, speculators held 408,629 net short positions
in 10-year T-note futures.
    On Tuesday, the yield on benchmark 10-year Treasury notes
 broke above 3.05 percent, which was last seen in
July 2011, as traders sold longer-dated government debt on
concerns about rising inflation and government debt.

    The 10-year yield climbed to 3.128 percent early Friday
before slipping to 3.063 percent, 9 basis points higher on the
week, Reuters data showed.
    Speculators raised their net bullish positions in Treasury
bond futures to 11,854 contracts, while they increased net short
bets in ultra bond futures, which hit a record high at 187,904
contracts.
    Among other T-note futures, speculative net shorts in
five-year T-notes retreated from their record high to 643,081
contracts earlier this week. 
    Speculators scaled back their net shorts in two-year T-notes
for a fourth straight week to 31,029 contracts, the lowest in
nearly a year.
    Among interest rates contracts, speculative net shorts in
Eurodollar futures recorded their biggest weekly drop in 11
months to 3.80 million contracts.
    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) 
        May 15, 2018      Prior week
        week           
 Long         456,847        431,577
 Short        487,876        485,833
 Net          -31,029        -54,256
 
U.S. 5-year T-notes (Contracts of $100,000) 
        May 15, 2018      Prior week
        week           
 Long         541,907        544,450
 Short      1,184,988      1,201,358
 Net         -643,081       -656,908
 
U.S. 10-year T-notes (Contracts of $100,000) 
        May 15, 2018      Prior week
        week           
 Long         706,685        697,678
 Short      1,088,607      1,106,307
 Net         -381,922       -408,629
 
U.S. T-bonds (Contracts of $100,000) 
        May 15, 2018      Prior week
        week           
 Long         148,968        143,269
 Short        137,114        137,034
 Net           11,854          6,235
 
U.S. Ultra T-bonds (Contracts of $100,000) 
        May 15, 2018      Prior week
        week           
 Long          83,571         66,749
 Short        271,475        244,186
 Net         -187,904       -177,437
 Eurodollar (Contracts of $1,000,000) 
        May 15, 2018      Prior week
        week           
 Long         906,344        961,731
 Short      4,709,472      5,002,025
 Net       -3,803,128     -4,040,294
 Fed funds (Contracts of $1,000,000) 
        May 15, 2018      Prior week
        week           
 Long         288,028        268,470
 Short        221,207        222,037
 Net           66,821         46,433
 
 (Reporting by Richard Leong
Editing by James Dalgleish)
  
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