By Davide Barbuscia
NEW YORK, Oct 4 (Reuters) - Speculators' net bearish bets on U.S. 10-year Treasury note
futures rose to a record high in the week ended on Oct. 1, according to Commodity Futures
Trading Commission data released on Friday.
Net short bets on the benchmark 10-year note futures rose to 1,143,889
contracts from 1,025,278 a week earlier, the CFTC's latest Commitments of Traders data showed.
Net short positions on two-year Treasury futures also rose significantly to their largest
levels since July. Net bearish bets rose to 1,178,219 contracts from 1,046,560 a
week earlier. Net shorts on other Treasury futures declined.
Speculators made bets after the Federal Reserve in mid-September cut interest rates for
the first time in over four years amid rising concerns over the health of the U.S. economy.
Since then, long-term Treasury yields, which move inversely to prices, have climbed as
U.S. economic data showed continued resilience, while two-year yields moved roughly in range.
That changed on Friday, when labor market
data
far above expectations boosted yields across the curve, pushing investors to bet for a more
moderate pace of monetary policy easing than the one that may have been suggested by the central
bank's 50 basis point rate cut last month.
Two-year yields, which closely reflect bets on monetary policy changes, surged on Friday
to 3.92% from 3.71% Thursday.
"Today's report further reduces some of the near-term downside risks to the economy, and
should take some of the urgency out of rate cuts," Tiffany Wilding, an economist at PIMCO, said
in a note.
Rates futures traders on Friday priced out the chance of another 50 basis point cut at
the next Fed policy-setting meeting in November, while they assigned a nearly 100% possibility
to a 25 basis point rate cut, up from 68% on Thursday, CME Group data showed.
"The overall idea of the Fed easing rate has not changed today," said Jason Granet,
chief investment officer at BNY. "What today's numbers have left the market believing is a
question on the pace of rates normalization, rather than calling it into question."
Below is a table of the speculative positions in Treasury futures on the Chicago Board
of Trade in the latest week:
U.S. 2-year T-notes (Contracts of $200,000)
01 Oct 2024 week Prior week
Long 692,556 730,128
Short 1,870,775 1,776,688
Net -1,178,219 -1,046,560
U.S. 5-year T-notes (Contracts of $100,000)
01 Oct 2024 week Prior week
Long 550,762 587,823
Short 2,101,552 2,142,255
Net -1,550,790 -1,554,432
U.S. 10-year T-notes (Contracts of $100,000)
01 Oct 2024 week Prior week
Long 454,080 467,828
Short 1,597,969 1,493,106
Net -1,143,889 -1,025,278
U.S. T-bonds (Contracts of $100,000)
01 Oct 2024 week Prior week
Long 358,613 353,820
Short 455,191 506,402
Net -96,578 -152,582
U.S. Long T-bonds (Contracts of $100,000)
01 Oct 2024 week Prior week
Long 173,963 178,425
Short 437,181 444,804
Net -263,218 -266,379
Fed funds (Contracts of $1,000,000)
01 Oct 2024 week Prior week
Long 479,536 506,691
Short 233,843 290,831
Net 245,693 215,860
(Reporting by Davide Barbuscia; Editing by Leslie Adler and Richard Chang)
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