Weekly Commitment Of Traders: Futures, Hedge Fund Positions

Following futures positions of non-commercials are as of May 7, 2019.

10-year noteCurrently net short 330.6k, up 42.6k.

The 10-year Treasury yield (2.46 percent) fell eight basis points this week.  Not surprising considering it was a risk-off week in equities.  TLT (iShares 20+ year Treasury bond ETF) rallied 0.9 percent.  The ETF has now rallied for four straight weeks.  During this, bond vigilantes learned that the US economy expanded 3.2 percent in 1Q19 and that April produced 263,000 non-farm jobs – both better than expected – among other data points.  Yet, bonds keep getting bid up.

Most recently, this has been the case since the 10-year rate retreated from 2.61 percent on April 17.  Support-turned-resistance at 2.62 percent is a crucial level going back a decade.  Until this is decisively conquered, non-commercials who have built up decent-size net shorts in 10-year-note futures risk getting squeezed – again – at some point.

30-year bondCurrently net short 35k, down 3k.

Major economic releases next week are as follows.

The NFIB optimism index for April comes out Tuesday.  Small-business optimism inched up one-tenth of a point month-over-month in March to 101.8.  Sentiment has remained north of 100 for 28 straight months, including last August’s record 108.8.

Wednesday brings retail sales (April), industrial production (April), Treasury International Capital System data (March) and the NAHB housing market index (May).

In the 12 months to March, retail sales jumped 3.6 percent to a seasonally adjusted annual rate of $514.1 billion – a record.

Capacity utilization in March rose 0.8 percent year-over-year to 78.8 percent.  This was the slowest y/y advance in 25 months.

Foreigners net-sold $10.7 billion worth of US equities in February, for a 12-month total of minus $205.1 billion – a record.

Homebuilder optimism edged up a point m/m in April to 63 –a six-month high.  In December 2017, sentiment reached 74 – the highest since July 1999.

April’s housing starts are due out Thursday.  March starts inched down 0.3 percent m/m to 1.14 million units (SAAR) – a 22-month low.

The University of Michigan’s consumer sentiment index for May (preliminary) is scheduled for Friday.  Consumer sentiment in April dropped 1.2 points m/m to 97.2.  In March last year, sentiment reached 101.4, which was the highest since January 2004.

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