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Hedge funds build record short positions in 10-year US Treasury futures

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Hedge funds and other leveraged investors upped their net short positions on 10-year US Treasury futures to a record 1.29 million contracts as of 18 April, in an apparent show of confidence that the US economy can avoid a recession, according to a report by Bloomberg.

The report cites data from the US Commodity Futures Trading Commission (CFTC) as confirming that net shorts had increased for a fifth consecutive week.

Hedge funds seem to be backing the US central bank to win out in its desire to see further increases in borrowing costs. The 10-year Treasury yield has advanced nine basis points this month to 3.56%, regaining some of the 45-basis-point drop seen in March, but the yield remains in a deep discount to two-year rates.
 

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