CFTC COT Report Shows Largest Net Short As Yields Rise

The Commodity Futures Trading Commission (CFTC) Commitment of Traders reports show that the Eurodollar net short are the highest since 2006, according to the January 27 USD Rates Strategy report produced by the Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) (AMS:RBS).

A short interest rate price position is a bet that yields will rise.  After rapidly climbing after the taper decision was announced, rates have been mostly declining in January, catching many long term traders by surprise, who have been watching for an interest rate increase.  The ten year note, for instance, is today trading near 2.66%, benefiting from global market fears.  It had touched a high of 3% in late December.  Certain professional traders remain undaunted, expecting rates...