June 16, 2017 / 8:28 PM / 2 months ago

UPDATE 1-Speculators cut U.S. rate-hike bets before Fed meeting -CFTC

    * Speculative Eurodollar net shorts lowest since November
    * Speculators turn most bullish in federal funds since late
2015
    * Concerns on weakening inflation spur drop in rate-hike
bets

 (Recasts lead, adds background)
    June 16 (Reuters) - Speculators scaled back their bets
earlier this week ahead of the Federal Reserve's rate decision
on Wednesday, according to Commodity Futures Trading Commission
data released on Friday. 
    Speculators widely expected the U.S. central bank would
raise key overnight borrowing costs to 1.00-1.25 percent at this
week's meeting, while they reduced their positions on another
hike after this week due to evidence of inflation softening.
    The Fed previously raised rates back in March.
    Fed policy-makers on Wednesday stuck with their median
outlook for a possible third rate increase by year-end and
released more details on its plan to shrink its $4.5 trillion
balance sheet.   
    Speculators reduced their net bearish bets or shorts in
Eurodollar futures to 1.87 million contracts on June 13, the
fewest net shorts since Nov. 13, according to the CFTC's latest
Commitments of Traders data.              
    Speculators turned the most net bullish or long in federal
funds futures since November 2015. Their long positions exceeded
short positions in fed funds by 32,112 on Tuesday, compared with
last week's net shorts totaling 968. 
    Among Treasury futures, speculators were net long in 10-year
T-note futures by 273,969 contracts, up from 212,066 a week
earlier..
    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) 
        13 Jun 2017       Prior week
        week           
 Long         262,864        248,321
 Short        343,029        287,639
 Net          -80,165        -39,318
 
U.S. 5-year T-notes (Contracts of $100,000) 
        13 Jun 2017       Prior week
        week           
 Long         556,451        531,661
 Short        609,253        626,965
 Net          -52,802        -95,304
 
U.S. 10-year T-notes (Contracts of $100,000) 
        13 Jun 2017       Prior week
        week           
 Long         830,911        878,894
 Short        556,942        666,828
 Net          273,969        212,066
 
U.S. T-bonds (Contracts of $100,000) 
        13 Jun 2017       Prior week
        week           
 Long         176,070        159,365
 Short        117,261        136,455
 Net           58,809         22,910
 
U.S. Ultra T-bonds (Contracts of $100,000) 
        13 Jun 2017       Prior week
        week           
 Long          33,308         39,345
 Short        131,263        138,394
 Net          -97,955        -99,049
 Eurodollar (Contracts of $1,000,000) 
        13 Jun 2017       Prior week
        week           
 Long       1,034,586        881,830
 Short      2,904,796      3,147,743
 Net       -1,870,210     -2,265,913
 Fed funds (Contracts of $1,000,000) 
        13 Jun 2017       Prior week
        week           
 Long         326,953        321,166
 Short        294,841        322,134
 Net           32,112           -968
 
 (Reporting by Richard Leong; Editing by James Dalgleish and
Diane Craft)
  

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