CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned This Week

Following futures positions of non-commercials are as of March 12, 2019.

10-year noteCurrently net short 176.4k, down 56.9k.

Non-commercials continue to cut back net shorts, which late September last year was at a new record.  The 10-year Treasury yield (2.59 percent) fell three basis points in the week.  Early October last year, these notes yielded 3.25 percent.  Short-covering has helped.  In the right circumstances for bond bulls, this can continue.  They keep hammering on crucial support at 2.62 percent, which goes back a decade.  The 10-year has essentially hugged this support for two and a half months now.  Inability to rally off of this perhaps is a sign that bears are playing a weak hand.  A decisive breakdown raises the odds that in due course the 10-year heads toward two percent.

30-year bondCurrently net short 22.6k, down 7.6k.

Major economic releases next week are as follows.

Monday brings the NAHB housing market index for March.  Builder sentiment rose four points month-over-month in February to 62.  Sentiment hit 74 in December 2017, which was the highest since July 1999.

On Tuesday, revised estimates of January’s durable goods are scheduled.  Preliminarily in January, orders for non-defense capital goods ex-aircraft – proxy for business capex plans – grew 4.1 percent year-over-year.  December’s 2.1-percent increase was a 23-month low.

Also on Tuesday, a two-day FOMC meeting begins.  No change is expected in the fed funds rate – currently between 225 and 250 basis points.

February’s existing home sales are due out Friday.  January’s fell 1.2 percent m/m to a seasonally adjusted annual rate of 4.94 million units.  This was a third consecutive monthly drop.  From a year ago, sales were down 8.5 percent.

Crude oilCurrently net long 476.7k, up 14.2k.

In the week ended March 8, US crude stocks fell by 3.9 million barrels to 449.1 million barrels.  Gasoline stocks dropped by 4.6 million barrels to 246.1 million barrels.  Crude production was lower by 100,000 barrels per day to 12 million bpd, even as crude imports declined by 255,000 bpd to 6.7 mbpd.  Refinery utilization inched up one-tenth of a percentage point to 87.6 percent.  Distillate stocks, however, rose by 383,000 barrels to 136.4 million barrels.

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