10-Year Note Speculators strongly pared their bearish bets this week

June 29, 2019

June 29th – By CountingPips.comReceive our weekly COT Reports by Email

10-Year Note Non-Commercial Speculator Positions:

Large bond speculators sharply pulled back on their bearish net positions in the 10-Year Note futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of 10-Year Note futures, traded by large speculators and hedge funds, totaled a net position of -281,099 contracts in the data reported through Tuesday June 25th. This was a paring of the bearish position by 121,885 net contracts from the previous week which had a total of -402,984 net contracts.

The week’s net position was the result of the gross bullish position (longs) gaining by 51,131 contracts (to a weekly total of 672,136 contracts) that combined with the gross bearish position (shorts) that declined by -70,754 contracts for the week (to a total of 953,235 contracts).

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Large Specs have been betting the wrong way

The 10-year note speculators sharply reduced their bearish position this week by over one hundred thousand contracts and by the largest one-week amount since November 13th of 2018. This works out to approximately a thirty percent cut in their bearish positions on the week.

The 10-year speculators had been adding to their bearish bets in ten out of the previous thirteen weeks despite the strength of the US Treasury bonds. These usually reliable trend-followers have been caught on the wrong side of this market as 10-year bonds have rallied approximately 7.5% this year and yields have plummeted with the 10-year yield currently at 2.00%.

This week’s sharp pullback for speculators bring the current standing under the -300,000 net contract level for the first time in eight weeks and the lowest bearish standing since April 16th.

10-Year Note Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of 219,912 contracts on the week. This was a weekly drop of -120,487 contracts from the total net of 340,399 contracts reported the previous week.

10-Year Note Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the 10-Year Note Futures (Front Month) closed at approximately $128.12 which was a boost of $0.62 from the previous close of $127.50, according to unofficial market data.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

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