The bond speculators are certainly buying into the Fed jive about little inflation and permanent low rates nirvana: hook, line and sinker, and boy have the commercials given it to them, umh. Maybe there is well deserved justice in life after all, as I think their fates will be sealed by the ISM report Monday: it will be a jumble of scant inventories, bottlenecks, and more prices paid inflation. How that translates into total activity, hard to say, but I'd say like the last report, only "more intense" if that's the right word. Out at 7:00 PST.
ism.ws
There's one more significant day of the Daily Treasury Statement on wages and salaries to report for Feb., but I show a respectable 110,493 versus 108,222 as of today. That might well generate 200,000 jobs plus on Friday the 5th. Then there's the lurking "we'll get to it, buy hey not important", PPI report, and no one has to ask what I think that one is. Could be a redefining week. Never seen so many people deserving of their fate, and I WILL gloat and grave dance.
Reuters
Speculators ramp up long US Treasuries bets - CFTC
Friday February 27, 6:32 pm ET
NEW YORK, Feb 27 (Reuters) - Bond speculators in the
Chicago futures pits built up their long positions in 10-year
contracts to a nine-month high in the latest week, suggesting
again that the market's recent rally may be setting up for a
reversal.
The net long positions of noncommercial accounts, or
speculators, in 10-year futures grew to 52,831 in the week
ended Feb. 24, the highest since last June and the second
highest in the past year, according to futures-only data from
the Commodity Futures Trading Commission.
Over that week, the March 10-year contract was mostly
steady, edging up to 115-1.5/32 from 114-25.5/32. It ended
Friday at a contract high of 115-15.5/32.
The speculative positions in futures are used by analysts
as an inverse indicator of future market direction. Thus a rise
in long positions typically means the market is setting itself
up for a slide.
During the past several months, big short positions have
helped put a floor under Treasury prices and have even helped
propel the recent rally, which pushed the yield on the 10-year
note back under 4 percent this week. With speculators now long
in Treasuries, the market could suffer a deeper drop on any
surprisingly positive economic news.
Net long positions in five-year futures also hit yet
another record high, rising to 250,599 in the latest week. Net
longs in five-year futures have been surging for three straight
months. But the net longs in 30-year bonds were cut in half
after hitting a five-year high the prior week, dipping to
24,476 from 49,585.
Below is a table of the non-commercial positions in futures
only. Contracts have a face value of $100,000.
30-YEAR BONDS
2/24/04 week 2/17/04 week
Long 81,027 104,463
Short 56,551 54,878
Net 24,476 49,585
10-YEAR NOTES
2/24/04 week 2/17/04 week
Long 232,593 203,230
Short 179,762 215,358
Net 52,831 -12,128
FIVE-YEAR NOTES
2/24/04 week 2/17/04 week
Long 354,183 349,440
Short 103,584 119,053
Net 250,599 230,387
TWO-YEAR NOTES
2/24/04 week 2/17/04 week
Long 66,869 53,480
Short 25,149 24,083
Net 41,720 29,397 |
