UPDATE 1-U.S. Treasury 10-year, 2-year futures' net shorts slide in latest week -CFTC

(Adds details, CFTC table) By Gertrude Chavez-Dreyfuss NEW YORK, July 1 (Reuters) - Speculators pared bearish bets on benchmark U.S. Treasury 10-year and two-year note futures, more than a week after the Federal Open Market Committee (FOMC) announced a 75 basis-point interest rate hike, Commodity Futures Trading Commission data showed on Friday. U.S. 10-year note futures' net shorts hit 181,680 contracts in the week ended June 28, the lowest since mid-May. A week earlier, speculators held net short contracts of 228,184 in 10-year note futures. Net shorts on U.S. Treasury two-year note futures, which are often sensitive to rate move expectations, also fell in the latest week with 102,118 contracts, the smallest net short since late May. With the decline in net shorts in both U.S. two-year and 10-year note futures, bond markets have signaled that the Federal Reserve could be done hiking rates sooner than expected, with inflation seen to have reached its peak. Fed funds futures on Friday have priced in 173 basis points of cumulative tightening by the Fed by the end of the year, down from about 220 bps of expected hikes right after the June meeting. The market's pricing for the terminal rate, or the peak for the Fed's policy rate, has also fallen to 3.25%, from about 4% following the June policy meeting. Since the June rate hike, the 10-year yield has fallen 70 basis points and was last down 8 bps at 2.8894%. The U.S. two-year yield, on the other hand, has declined 67 bps. It last traded at 2.839%, down 9 bps. While inflation worries have started to fade, recessionary fears have begun to intensify, prompting views that the Fed may start cutting rates by next year and in 2024. CFTC data also showed U.S. five-year futures' net shorts rising to 202,664 contracts, the highest since early June. 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) 28 Jun 2022 Prior week week Long 275,428 257,375 Short 377,546 376,658 Net -102,118 -119,283 U.S. 5-year T-notes (Contracts of $100,000) 28 Jun 2022 Prior week week Long 330,759 373,807 Short 533,423 477,898 Net -202,664 -104,091 U.S. 10-year T-notes (Contracts of $100,000) 28 Jun 2022 Prior week week Long 274,858 269,685 Short 456,538 497,869 Net -181,680 -228,184 U.S. T-bonds (Contracts of $100,000) 28 Jun 2022 Prior week week Long 80,552 99,282 Short 118,805 118,604 Net -38,253 -19,322 U.S. Ultra T-bonds (Contracts of $100,000) 28 Jun 2022 Prior week week Long 42,179 42,428 Short 380,162 387,484 Net -337,983 -345,056 Eurodollar (Contracts of $1,000,000) 28 Jun 2022 Prior week week Long 588,828 614,934 Short 2,745,258 2,612,823 Net -2,156,430 -1,997,889 Fed funds (Contracts of $1,000,000) 28 Jun 2022 Prior week week Long 243,400 231,344 Short 122,818 106,923 Net 120,582 124,421 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis and David Gregorio)