Commodity Futures Trading Commission (CFTC) data show that speculators closed 2022 with one of the smallest three-month SOFR rate futures short positions of the year, a light short dollar position, and substantial short positions cross the U.S. Treasuries curve.
A short position is essentially a wager that an asset's price will fall, and a long position is a bet it will rise.
chartFunds' U.S. interest rate expectations reached fever pitch around August and September last year when their net short position exceeded 1 million contracts.
chartIn the 10-year space, funds ended 2022 with their third largest net short position of the year, at 383,602 contracts.
But funds have retained their substantial net short position.