(Recasts with Eurodollar bets, adds details throughout) Feb 24 (Reuters) - Speculators' net bearish bets on Eurodollar futures reached a record peak on Tuesday, signaling increased expectations the Federal Reserve will step up its pace of interest rate increases on signs of an improving U.S. economy, Commodity Futures Trading Commission data released on Friday showed.
The margin of speculators' bearish bets over "long" bets grew to 2.587 million contracts on Tuesday from 2.438 million a week earlier, according to the CFTC's latest Commitments of Traders data. Eurodollar futures are a measure of expectations for interbank borrowing costs.
This latest snapshot of speculators' net shorts in Eurodollar came as some Federal Reserve officials including Chair Janet Yellen have raised the possibility of a faster pace of rate hikes in 2017 than what traders overall have priced in.
On Wednesday, however, the Federal Reserve's minutes on its Jan. 31-Feb. 1 policy meeting reduced traders' expectations the central bank will raise rates when it meets next month.
"Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations," the Fed said in the minutes.
Speculators ramped up their net shorts in futures contracts on the fed funds rates a day before the release of the Fed minutes. Their net shorts on fed funds futures grew to 159,076 contracts, the most since July 2015 and up from 140,197 a week ago.
The following tables show 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) Feb. 21, 2017 Prior week week Long 317,140 306,050 Short 269,039 276,089 Net 48,101 29,961 U.S. 5-year T-notes (Contracts of $100,000) Feb. 21, 2017 Prior week week Long 372,861 339,962 Short 677,810 696,097 Net -304,949 -356,135 U.S. 10-year T-notes (Contracts of $100,000) Feb. 21, 2017 Prior week week Long 528,284 525,758 Short 830,583 867,282 Net -302,299 -341,524 U.S. T-bonds (Contracts of $100,000) Feb. 21, 2017 Prior week week Long 95,313 94,366 Short 119,037 120,611 Net -23,724 -26,245 U.S. Ultra T-bonds (Contracts of $100,000) Feb. 21, 2017 Prior week week Long 54,873 52,045 Short 123,848 121,400 Net -68,975 -69,355 Eurodollar (Contracts of $1,000,000) Feb. 21, 2017 Prior week week Long 464,527 469,994 Short 3,051,633 2,907,557 Net -2,587,106 -2,437,563 Fed funds Feb. 21, 2017 Prior week week Long 128,077 136,199 Short 287,153 276,396 Net -159,076 -140,197 (Reporting by Richard Leong; Editing by Leslie Adler)