Big bets against U.S. bonds before auctions: CFTC

NEW YORK (BestGrowthStock) – Bond speculators held big bets against long-dated Treasuries in the futures market in advance of this week’s auctions, according to Commodity Futures Trading Commission data released on Friday.

To short a bond is to bet it will fall in value, while being long a bond is a bet that its value will rise.

Long-dated Treasuries in the futures and cash markets have been under selling pressure on worries over United States’ heavy borrowing to finance its deficit.

Signs of improving growth also revived talk of rising inflation and the Federal Reserve raising short-term interest rates earlier than previous thought.

Speculators were forced to unwind much their short bets after solid demand at a $21 billion 10-year note sale on Wednesday and a $13 billion 30-year bond auction on Thursday, analysts said.

“I wouldn’t be surprised to see them reverse by next week,” said George Goncalves, head of U.S. interest rate strategy at Nomura Securities International in New York.

In advance of this week’s auctions, speculators pared their bets against the 10-year Treasury futures in the latest week to 337,369 contracts on Tuesday, down 10,976 from the prior week.

Their net short positions in 10-year T-notes remained huge at 244,733, as long T-note positions fell by 5,792 contracts. For more, see

“Non-commercial” traders raised their shorts on 30-year T-bond futures in the latest week to 164,922 contracts, up 8,701 from the prior week. The net short positions in T-bonds shrank a tad to 114,017. For more, see

A “non-commercial” trader does not use futures contracts for hedging purposes but instead for bets to make money.

Investing Analysis

(Reporting by Richard Leong)

Big bets against U.S. bonds before auctions: CFTC