- Net long positions on Treasury bond futures soar: CFTC data
- U.S. government debt surged following the ‘Leave’ victory
Futures speculators were the most bullish since 2004 on Treasury bond futures in the lead-up to this week’s U.K. referendum on European Union membership.
Hedge funds and other traders boosted net-long positions on bond futures to 103,471 contracts as of June 21, two days before the British vote, from about 77,277 a week earlier, according to Commodity Futures Trading Commission data released Friday.
The traders’ positioning has grown more bullish since the weaker-than-forecast labor report for May and as Federal Reserve officials on June 15 released projections indicating they expect to lift interest rates at a slower pace.
The stance proved prescient as Britons’ vote to leave the EU caused Treasury yields to plunge Friday, while futures traders slashed bets on a Fed rate increase this year. The market-implied probability of a Fed hike in 2016 fell to 17 percent, from 38 percent a week ago.
Treasuries maturing in 10 or more years returned 10.3 percent this year through June 23rd, data compiled by Bloomberg show.