MBS Week Ahead: Holiday-Punctuated Week Still Has a Lot to Tell Us

Posted To: MBS Commentary

Every Friday, the CFTC issues a report on trading position in Treasury Futures (and everything else in the commodities futures/options complex). Here's a link if you want to explore the rabbit hole, but I'll cut to the important part and save you the time. Following the US presidential election, net short positions (traders betting on rates moving higher) began ramping up fairly quickly. That trend shifted in late April and Treasury traders have been "net long" ever since. When those net-long positions build up to their higher levels, it's not uncommon to see a corrective day or two of weakness. This was the case in the week ending May 26th, which saw net-long positions at their highest levels of the year. The position data is recorded on Tuesday and reported on Friday...(read more)

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