News Digest:

Hedge funds and leveraged investors have significantly reduced their bearish bets on five-year US Treasury futures, with net short positions hitting their lowest level since July, according to the Commodity Futures Trading Commission (CFTC). This marks a third consecutive week of declines, reflecting strategic adjustments ahead of year-end portfolio rebalancing.

As of December 10, leveraged funds cut their net short positions to 2.78 million contracts, down from the record levels observed in mid-November. Similarly, speculative traders trimmed their bearish positions to 1.79 million contracts from 1.86 million the previous week, signaling broader caution among market participants.

Institutional asset managers also scaled back their net long positions in five-year Treasury futures to the lowest levels in six weeks. This comes after a surge to record highs last month, indicating a recalibration of strategies. Asset managers often maintain a long bias to align with benchmark indices.

Positioning trends across other maturities reveal mixed sentiment. Hedge funds increased bearish bets on two-year Treasury futures to the highest level since mid-November, while trimming short positions in ten-year futures. Asset managers, meanwhile, reduced net long positions across two-year futures but modestly increased them for ten-year contracts.

End Notes

Source: https://www.hedgeweek.com/hedge-funds-reduce-bearish-bets-on-five-year-treasury-futures-ahead-of-year-end/