Speculative bets against 2-year Treasuries hold steady while 10-year shorts dip

BY Reuters | TREASURY | 04/19/24 03:41 PM EDT
       By David Randall
       NEW YORK, April 19 (Reuters) - Speculators' net bearish
bets on U.S. 10-year Treasury note futures fell in the latest
week, 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
362,039 contracts on April 16, according to the CFTC's latest
Commitments of Traders data.
    A week earlier, speculators held 506,885 net short positions
in 10-year T-note futures.
    The declining bearish bets came as yields jumped near
5-month highs following signs of sticky inflation in the US and
strength in the labor market. A number of Fed officials,
including Fed Chair Jerome Powell, have noted over the last week
that the central bank does not feel the need to rush to cut
interst rates given the economic stability.
    Bond yields move in the opposite direction of prices.
    Bearish bets against 2-year Treasuries, which are more
interest-rate sensitive, slightly rose, to a net short position
of 946,303 contracts, compared with 946,290 the week before.
    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
        16 Apr 2024
        week
 Long
              503,827        480,808

 Short
            1,450,130      1,427,098

 Net
             -946,303       -946,290


U.S. 5-year T-notes (Contracts of $100,000)
                          Prior week
        16 Apr 2024
        week
 Long
              461,614        453,736

 Short
            1,655,836      1,693,156

 Net
           -1,194,222     -1,239,420


U.S. 10-year T-notes (Contracts of $100,000)
                          Prior week
        16 Apr 2024
        week
 Long
              533,604        494,910

 Short
              895,643      1,001,795

 Net
             -362,039       -506,885


U.S. T-bonds (Contracts of $100,000)
                          Prior week
        16 Apr 2024
        week
 Long
              257,665        228,657

 Short
              273,429        303,847

 Net
              -15,764        -75,190


U.S. Ultra T-bonds (Contracts of $100,000)
                          Prior week
        16 Apr 2024
        week
 Long
              138,661        138,457

 Short
              433,461        434,312

 Net
             -294,800       -295,855

 Eurodollar (Contracts of $1,000,000)
                          Prior week
        13 Jun 2023
        week
 Long
              118,404        141,397

 Short
              130,076        144,442

 Net
              -11,672         -3,045

 Fed funds (Contracts of $1,000,000)
                          Prior week
        16 Apr 2024
        week
 Long
              397,356        330,432

 Short
              338,628        361,128

 Net
               58,728        -30,696


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.

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