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UPDATE 1-Speculative Eurdollar net longs fall from 11-year high -CFTC

(Recasts lead paragraph, adds graphics) July 26 (Reuters) - Speculators scaled back their bullish bets on short-term U.S. interest rates futures from their highest level in over 11 years earlier this week as they considered a possible rate decrease from the Federal Reserve, government data released on Friday showed. Their net longs on Eurodollar futures fell to 1.447 million contracts on Tuesday, down from 1.514 million a week earlier which was the highest since April 2008, according to Commodity Futures Trading Commission data. On July 18, New York Fed President John Williams, an influential member at the central bank, said the Fed may need to take steps to combat downside risks even if the economy is doing well. His remarks triggered a rally in U.S. rates futures as traders thought the Fed might lower key lending rates by an aggressive half a point at its July 30-31 policy meeting. However, those bets faded after the New York Fed later that day said the comments were not about upcoming policy action. In addition to paring their net longs in Eurodollars, speculators piled on bearish bets in federal funds futures. Their net shorts in fed funds grew by 109,490 contracts, the most since June 2018, to 144,020 on Tuesday. As of late Friday, fed funds contracts implied traders fully expect a rate-cut from the Fed next Wednesday. They suggested traders expect only a 19% chance of a half-point cut, according to CME Group's FedWatch program. At one point last Thursday, traders had priced in a 71% chance of a half-point rate decrease following Williams' remarks. Among Treasury futures, speculators net shorts in 10-year Treasury futures rose to 380,169 contracts on July 23, the highest in five weeks, according to the CFTC's latest Commitments of Traders data. A week earlier, their net shorts in 10-year T-notes were 347,222. Below is a table of the speculative positions in Treasury futures on the Chicago Board of Trade and in Eurodollar futures on the Chicago Mercantile Exchange in the latest week: U.S. 2-year T-notes (Contracts of $200,000) 23 Jul 2019 Prior week week Long 957,802 873,887 Short 1,218,448 1,180,727 Net -260,646 -306,840 U.S. 5-year T-notes (Contracts of $100,000) 23 Jul 2019 Prior week week Long 858,376 864,608 Short 957,171 965,196 Net -98,795 -100,588 U.S. 10-year T-notes (Contracts of $100,000) 23 Jul 2019 Prior week week Long 678,489 680,971 Short 1,058,658 1,028,193 Net -380,169 -347,222 U.S. T-bonds (Contracts of $100,000) 23 Jul 2019 Prior week week Long 138,262 146,509 Short 179,908 168,256 Net -41,646 -21,747 U.S. Ultra T-bonds (Contracts of $100,000) 23 Jul 2019 Prior week week Long 92,208 95,711 Short 381,180 389,953 Net -288,972 -294,242 Eurodollar (Contracts of $1,000,000) 23 Jul 2019 Prior week week Long 2,772,692 2,757,994 Short 1,325,969 1,244,230 Net 1,446,723 1,513,764 Fed funds (Contracts of $1,000,000) 23 Jul 2019 Prior week week Long 331,323 354,705 Short 475,343 389,235 Net -144,020 -34,530 (Reporting by Richard Leong; editing by Jonathan Oatis and Tom Brown)