Smart Money Bond Investors Still Have Near-Record Long Positioning

The most recent CFTC commitment of traders report revealed little change in the historic long positioning of smart money bond investors. Despite the fall back in rates since their late-December peak, the smart money commercial traders are still long almost 519K options and futures contracts on the 10Y treasury bond and 418K contracts on the 5Y treasury bond. In the past, extreme levels of smart money positioning – whether long or short – has resulted in important peaks/troughs in rates. Therefore, a reversion back to neutral positioning would likely coincide with a further fall back in rates.