Speculators pare net shorts on U.S. 10-year, two-year note futures -CFTC

BY Reuters | TREASURY | 12/02/22 04:58 PM EST
          NEW YORK, Dec 2 (Reuters) - Speculators trimmed net
bearish bets on U.S. 10-year and two-year Treasury note futures
in the latest week, according to Commodity Futures Trading
Commission data released on Friday.
    Net short position in U.S. 10-year futures fell to  296,772
contracts in the week ended Nov. 29, compared with 321,256 net
shorts in the previous week, according to the CFTC's latest
Commitments of Traders data.
    On the shorter end of the curve, net short positioning on
U.S. two-year note futures slid to 528,178, from net shorts of
566,995 the week before.
    The decline in net short positions, or bets that Treasury
prices will fall leading to a rise in yields, was in line with
expectations that the Federal Reserve will slow the pace of its
rate hikes as it tries to engineer a softer landing for the
world's largest economy.
    On Wednesday, Fed Chair Jerome Powell said the U.S. central
bank could ease the pace of interest rate hikes "as soon as
December" but warned that the fight against inflation is far
from over.
    Since the beginning of November, U.S. two-year yields have
dropped by about 70 basis points (bps), while 10-year yields
have plunged about 73 bps.
    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)
                          Prior week
        29 Nov 2022
        week
 Long
              156,249        168,580

 Short
              684,427        735,575

 Net
             -528,178       -566,995

 U.S. 5-year T-notes (Contracts of $100,000)
                          Prior week
        29 Nov 2022
        week
 Long
              316,986        334,470

 Short
              846,335        858,124

 Net
             -529,349       -523,654

 U.S. 10-year T-notes (Contracts of $100,000)
                          Prior week
        29 Nov 2022
        week
 Long
              469,072        473,384

 Short
              765,844        794,640

 Net
             -296,772       -321,256

 U.S. T-bonds (Contracts of $100,000)
                          Prior week
        29 Nov 2022
        week
 Long
               47,371         60,382

 Short
              151,288        150,866

 Net
             -103,917        -90,484

 U.S. Ultra T-bonds (Contracts of $100,000)
                          Prior week
        29 Nov 2022
        week
 Long
               60,228         76,599

 Short
              449,632        453,610

 Net
             -389,404       -377,011

 Eurodollar (Contracts of $1,000,000)
                          Prior week
        29 Nov 2022
        week
 Long
              520,547        564,913

 Short
            2,229,899      2,390,208

 Net
           -1,709,352     -1,825,295

 Fed funds (Contracts of $1,000,000)
                          Prior week
        29 Nov 2022
        week
 Long
              183,039        196,688

 Short
              216,891        185,515

 Net
              -33,852         11,173

 (Reporting by Gertrude Chavez-Dreyfuss in New York
Editing by Matthew Lewis)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article