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UPDATE 1-Speculative Eurodollar net longs fall from record high -CFTC

By Richard Leong

(Recasts with Eurodollar net long, adds background, byline) By Richard Leong Aug 23 (Reuters) - Speculators scaled back record-high bullish positions in Eurodollar futures earlier this week due to reduced expectations of aggressive interest rate-cutting from the Federal Reserve, government data released on Friday showed. Long positions in Eurodollar rates contracts exceeded short positions by 2.005 million contracts, down 61,871 from the previous week's record high level, according to Commodity Futures Trading Commission data released on Friday. This week, rates futures implied traders were positioned for two more rate decreases from the Fed this year, compared with three rate cuts a week earlier. On Friday, Fed Chair Jerome Powell said the central bank would "act as appropriate" to keep the U.S. economy healthy, but that balanced message drew the ire of President Donald Trump who has called for rapid and steep rate cuts. Trump also unnerved financial markets by suggesting he would respond to China's retaliatory tariffs on U.S. goods announced earlier Friday. Speculators tweaked their positions in Treasury futures from a week earlier. For example, net bearish bets on U.S. 10-year Treasury note futures fell in the latest week following the prior week's massive bond market rally fueled by recession fears. The net amount of speculators' short positions in 10-year T-notes exceeded long positions by 401,804 contracts on Aug. 20, according to the CFTC's latest Commitments of Traders data A week earlier, speculators held 414,346 net short positions in 10-year T-note futures. Last week, 10-year note yields hit a three-year low at 1.475%, while 30-year yields touched an all-time low at 1.916%. The two-to-10-year part of the yield curve also inverted for the first time since 2007 last week. It has inverted several times this week. This market phenomenon often precedes a U.S. recession. 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) 20 Aug 2019 Prior week week Long 951,083 966,597 Short 1,283,509 1,291,960 Net -332,426 -325,363 U.S. 5-year T-notes (Contracts of $100,000) 20 Aug 2019 Prior week week Long 795,268 804,711 Short 910,740 908,568 Net -115,472 -103,857 U.S. 10-year T-notes (Contracts of $100,000) 20 Aug 2019 Prior week week Long 620,463 635,384 Short 1,022,267 1,049,730 Net -401,804 -414,346 U.S. T-bonds (Contracts of $100,000) 20 Aug 2019 Prior week week Long 143,285 143,078 Short 208,361 210,379 Net -65,076 -67,301 U.S. Ultra T-bonds (Contracts of $100,000) 20 Aug 2019 Prior week week Long 112,632 112,658 Short 418,732 409,588 Net -306,100 -296,930 Eurodollar (Contracts of $1,000,000) 20 Aug 2019 Prior week week Long 3,137,627 3,214,645 Short 1,131,780 1,146,927 Net 2,005,847 2,067,718 Fed funds (Contracts of $1,000,000) 20 Aug 2019 Prior week week Long 265,276 246,137 Short 305,646 310,971 Net -40,370 -64,834 (Reporting by Richard Leong; Editing by Richard Chang)