Reserve

Hedge

<div class="textg" style="text-align: justify; font-weight: lighter; line-height: 1.3em; font-size: 15px; border-radius: 3px; color: #80909a; padding: 10px; background-color: #F4F6F9; margin-bottom: 15px;">
 Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions.
</div>
<p class="has-drop-cap">Hedge funds’ net bearish positions on U.S. 10-year Treasury note futures <a aria-label="have surged (opens in a new tab)" href="https://finance.yahoo.com/news/us-treasury-10-futures-net-203607575.html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">have surged</a> to the highest level ever in the latest week, data from the Commodity Futures Trading Commission (CFTC) revealed. Meanwhile, the number of bearish bets on two-year note futures has declined, with net positions reaching their lowest point since August 2023.</p>
<h3 id="net-short-positions-in-10y-treasuries-hit-890k-last-week">Net Short Positions in 10Y Treasuries Hit 890K Last Week</h3>
<p>According to data released by the Commodity Futures Trading Commission on Friday, speculators have increased their net bearish bets on U.S. 10-year Treasury note futures to a historic high.</p>
<p>In the latest week, net short positions in 10-year Treasury futures rose to 889,385 contracts, which increased from the previous week’s 787,020 contracts.</p>
<p>Conversely, there was a reduction in bearish bets on two-year note futures, with net positions at their lowest since August, as indicated by the CFTC data. 10-year and 2-year notes traded slightly lower on Friday, <a href="https://tokenist.com/10-year-treasury-yield-holds-above-4-1-as-early-rate-cuts-seem-unlikely/" rel="noopener noreferrer nofollow" class="deco-link">closing at 4.11%</a> and 4.39%, respectively.</p>
<div class="cta-referral"><img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async">
 <div class="cta-referral__text">
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Telegram group&nbsp;and never miss a breaking digital asset story.</a></p>
 </div>
</div>
<h3 id="the-implications-of-a-massive-short-position-on-10y-t-note-futures">The Implications of a Massive Short Position on 10Y T-Note Futures</h3>
<p>The historic surge in the number of short positions in 10-year yields suggests that hedge funds strongly believe that a downturn <a href="https://www.nytimes.com/2024/01/20/business/economy/economy-recession-soft-landing.html" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">can be avoided</a> despite the impact of the inflation-fighting policy tightening on economic activity over the past two years.</p>
<p>At the same time, it could indicate that leveraged investors, particularly hedge funds, appear to anticipate a stickier inflation scenario than what is currently priced into the broader market. Simultaneously, it does not reflect the views that a near-term recession is likely.</p>
<p>Analysts and economists closely monitor <a href="https://tokenist.com/investing/how-to-buy-bonds/" rel="noopener noreferrer nofollow" class="deco-link">bond yields</a> because they serve as crucial indicators of financial markets’ overall health and sentiment. They provide insights into investors’ expectations for inflation, economic growth, and interest rates.</p>
<p>As such, changes in bond yields can signal shifts in market sentiment, impacting investment strategies and influencing decisions made by central banks and policymakers. Generally, factors such as economic data releases, inflation expectations, central bank policies, and geopolitical events contribute to movements in this market.</p>
<p>After hiking interest rates 11 times to 5.25% – 5.50%, the Federal Reserve is <a href="https://tokenist.com/spx-spikes-1-4-as-fed-pivot-sparks-market-optimism/" rel="noopener noreferrer nofollow" class="deco-link">largely expected</a> to begin cutting interest rates in 2024. Expectations of this decision have been one of the primary catalysts <a href="https://tokenist.com/after-novembers-rally-the-spx-is-only-2-below-its-2023-intraday-high/" rel="noopener noreferrer nofollow" class="deco-link">driving the stock market’s rally</a> in recent weeks.</p>
<p>However, an unexpected uptick in the consumer price index (CPI) in December has indicated that inflation remains stickier than anticipated, suggesting that the first cut may not come as soon as expected.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em><strong>Do you think the Federal Reserve will start cutting rates as quickly as the market expects? Let us know in the comments below! </strong></em></p>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/net-short-position-on-10y-t-note-futures-at-record-level-as-hedge-funds-stay-bearish/">Net Short Position on 10y T-Note Futures at Record Level as Hedge Funds Stay Bearish</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Net Short Position on 10y T-Note Futures at Record Level as Hedge Funds Stay Bearish

Table of Contents

Tokenist

Other articles published on Jan 22, 2024

Breaking News: Terraform Labs Files For Bankruptcy

The First Bitcoin ETF Provider Invests in De.Fi, a Web3 SuperApp

Grayscale’s Bitcoin Sales: Implications for the Cryptocurrency Market

Solana Mobile SAGA 2.0 Confirms 30,000 Pre-Orders, What Super Bullish Impact Does This Have On SOL?

Ripple Wins Big: US Banks Expected To Adopt XRP For International Payments

Grayscale's Bitcoin Fund Could Suffer Further Selloff: JPMorgan

Join our free newsletter for daily crypto updates!