May 17, 2019 / 8:15 PM / 8 days ago

UPDATE 1-Speculative U.S. 10-year T-note net shorts hit six-month peak -CFTC

    * Speculative ultra bond net shorts hit record high
    * Speculators raise Eurodollar net longs to most since Oct
2015

 (Adds background, details)
    May 17 (Reuters) - Speculators' net bearish bets on U.S.
10-year Treasury note futures rose earlier this week after China
and the United States increased tariffs on each other's goods,
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
352,817 contracts on May 14, according to the CFTC's latest
Commitments of Traders data.
    A week earlier, speculators held 330,562 net short positions
in 10-year T-note futures.
    Speculators also increased their net shorts in T-bond
futures to 45,943 contracts, a five-month high, while their net
shorts in ultra bonds hit a record peak at 333,509 contracts.
 
    On Monday, Beijing said it planned to set import tariffs
ranging from 5% to 25% on 5,140 U.S. products on a revised
$60-billion target list. It said the tariffs would take effect
on June 1.
    China's retaliatory measure followed Washington's tariff
increase on $200 billion of Chinese imports a week ago as talks
between the world's biggest economies unexpectedly broke down.
U.S. President Donald Trump has said the Chinese government
backtracked on commitments it made during months of
negotiations.
    Fears of a trade war rattled stock markets around the world,
spurring safe-haven demand for Treasuries, gold and yen.
    Benchmark 10-year Treasury note yields fell to a
six-week low of 2.354% this week, while two-year yields
 touched a 15-month low at 2.139%.
    Shorter-dated Treasury yields have fallen and interest rates
futures prices have risen on increased expectations the Federal
Reserve may lower key lending rates to combat any economic
slowdown from trade disputes between the United States and its
trading partners.
    Speculators pared their net shorts in two-year T-note
futures to 33,305 contracts on Tuesday, a 10-month low.

    Speculative net longs in Eurodollar futures increased to
520,230 contracts, the highest since Oct. 18, 2015. While
speculative net shorts in federal fund futures decreased to
113,468 contracts, the lowest in two months.

    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) 
        14 May 2019       Prior week
        week           
 Long       1,163,038      1,120,368
 Short      1,196,343      1,188,257
 Net          -33,305        -67,889
 
U.S. 5-year T-notes (Contracts of $100,000) 
        14 May 2019       Prior week
        week           
 Long         811,771        807,239
 Short        949,674        940,000
 Net         -137,903       -132,761
 
U.S. 10-year T-notes (Contracts of $100,000) 
        14 May 2019       Prior week
        week           
 Long         616,402        577,607
 Short        969,219        908,169
 Net         -352,817       -330,562
 
U.S. T-bonds (Contracts of $100,000) 
        14 May 2019       Prior week
        week           
 Long         147,150        152,449
 Short        193,093        187,474
 Net          -45,943        -35,025
 
U.S. Ultra T-bonds (Contracts of $100,000) 
        14 May 2019       Prior week
        week           
 Long          84,555        102,716
 Short        418,064        416,863
 Net         -333,509       -314,147
 Eurodollar (Contracts of $1,000,000) 
        14 May 2019       Prior week
        week           
 Long       1,769,489      1,751,238
 Short      1,249,259      1,345,478
 Net          520,230        405,760
 Fed funds (Contracts of $1,000,000) 
        14 May 2019       Prior week
        week           
 Long         228,346        134,291
 Short        341,814        290,015
 Net         -113,468       -155,724
 
 (Reporting by Richard Leong
Editing by James Dalgleish and Jonathan Oatis)
  
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