UPDATE 1-Hedge funds, non-commercials less bearish on 10-year Treasury futures -CFTC data

Adds CFTC table, details of other CFTC contracts, background

NEW YORK, Jan 17 (Reuters) - Leveraged funds and non-commercial traders pared back their net shorts on U.S. 10-year Treasury futures to the lowest levels since early July, according to data from the Commodity Futures Trading Commission released on Friday, as both participants unwound heavy short positioning accumulated last year.

CFTC data showed that in the week ended Jan. 14, net shorts, or bearish bets, by leveraged accounts, or hedge funds, on 10-year note futures fell to 1,267,611 contracts 1043602LNET, the lowest in six months. Hedge funds have gradually reduced their positioning on this maturity after hitting record net shorts in August 2024.

Leveraged funds have shown persistently net short bias in Treasury futures despite large swings in interest rates. Analysts said the majority of these trades are not directional positions, but meant to take advantage of basis trades, which are arbitrage trading schemes that profit from the difference in the price between cash Treasuries and their futures.

Non-commercial traders, defined by the CFTC as market participants who take a speculative position in futures without any direct business interest in them, also reduced their net shorts on 10-year futures to 567,935 contracts 1043602NNET in the week of Jan. 14. They posted all-time short positioning on 10-year futures in October.

This segment of the market has diminished in size, although they remain active participants.

Asset managers, or institutional investors, reduced their net longs on 10-year futures in the latest week to 1,633,891 1043602ANET. Their net longs hit a lifetime peak in late October.

Asset managers have persistently shown a long bias in Treasury futures to fulfill certain portfolio benchmarks.

Below is a table of the positions in Treasury futures by non-commercial traders on the Chicago Board of Trade in the latest week:

U.S. 2-year T-notes (Contracts of $200,000)

U.S. 5-year T-notes (Contracts of $100,000)

U.S. 10-year T-notes (Contracts of $100,000)

U.S. T-bonds (Contracts of $100,000)

U.S. Long T-bonds (Contracts of $100,000)

Fed funds (Contracts of $1,000,000)

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)

((gertrude.chavez@thomsonreuters.com; 646-301-4124))