Speculators including hedge funds reduced bets on a decline in Treasuries at the most rapid rate since June 2016 according to the latest Commodity Futures Trading commission data.
A total of $20 million of short positions were cut in a dollar-vallue per basis point move, driven mostly by short covering in 5-year and Eurodollar futures.
The data as of april 18 confirms that a large amount of short covering from fast money accounts was behind the surge in Treasuries over the past week which saw yields pushed to year to date lows that day.
For the EUR / USD pair, we can see a series of short positions gathering that can lead to an upward trend in the pair.
Source: Bloomberg
Junior Trader Stefan Panteleev
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