CFTC: Non Commerical's Positioning On Bonds
According to Commitment of Trader's Report (CFTC report), Non commercials (usually refers to fund managers) have been selling bonds since October (upper panel). Now their bonds' positioning is at 5 years low.
Lower panel shows the chart for 20 years Treasury bond ETF.
Based on past history, Non Commercial's position on bonds at extreme low had happened various time since 2010. In most cases (5 out of 6 times), this signal that bond prices are bottoming.
This does not mean that bond price will rebound next week. But at least we know that much of the bonds' selling by fund managers had been done.
This is usually a sign that sentiment is near to maximum pessimism. That also indicates that bonds are oversold in the near term.
Hence there is high probability of rebound in bond prices when there is a small good news or slight change in sentiment for bonds.
Source of the chart from Bloomberg.
Coincidentally Stanchart Private Bank says bonds offer good opportunity (video): http://video.cnbc.com/gallery/?video=3000574776&play=1
Lower panel shows the chart for 20 years Treasury bond ETF.
Based on past history, Non Commercial's position on bonds at extreme low had happened various time since 2010. In most cases (5 out of 6 times), this signal that bond prices are bottoming.
This does not mean that bond price will rebound next week. But at least we know that much of the bonds' selling by fund managers had been done.
This is usually a sign that sentiment is near to maximum pessimism. That also indicates that bonds are oversold in the near term.
Hence there is high probability of rebound in bond prices when there is a small good news or slight change in sentiment for bonds.
Source of the chart from Bloomberg.
Coincidentally Stanchart Private Bank says bonds offer good opportunity (video): http://video.cnbc.com/gallery/?video=3000574776&play=1
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