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A week ago, speculative net shorts on CME
futures on what banks charge each other to borrow dollars were
915,783 contracts.
Speculators have been reducing their bearish bets on Eurodollar
futures as data suggesting slowing global economic growth caused
a shift in expectations on the timing that the U.S. Federal
Reserve might raise short-term interest rates.
On Oct. 15, there was a massive exit of short bets in the
Eurodollar and Treasury futures.
Short-term rate futures implied traders now see the central bank
likely raising rates at the end of 2015. A month ago, they had
signaled traders were pricing a rate hike in mid-2015.
Over the past six weeks, speculators have reduced their net
short Eurodollar positions by 1.17 million contracts, which was
the biggest net change on record over a comparable period.
Meanwhile, the weekly drop in Eurodollar open interest of about
872,000 was the biggest weekly fall since late March 2012. This
was also the biggest weekly drop ever to occur outside of a
contract expiration week.
Asset managers reduced their outright shorts in Eurodollar by
186,644 contracts to 628,723 in the latest week, while leveraged
funds slashed their shorts by 369,858 to 1.806 million,
according to another CFTC report released on Friday.
Bond dealers on the other hands increased their short bets in
Eurodollar futures by 370,895 to 1.701 million in the latest
week.
(Reporting by Richard Leong and Daniel Burns; Editing by Chris
Reese and Lisa Shumaker)
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