A growing short position on US Treasury futures is directly attributable to hedge fund placing bets on the spread between the futures and their underlying assets, according to a report by Bloomberg citing data from the Commodity Futures Trading Commission.

A growing short position on US Treasury futures is directly attributable to hedge fund placing bets on the spread between the futures and their underlying assets, according to a report by Bloomberg citing data from the Commodity Futures Trading Commission (CFTC). 

The report says the latest data released by the CFTC shows that leveraged funds have large net short positions across several Treasury futures contracts, including a record short in the 10-year note. The report says strategists says this indicates an increase "in basis trading activity", which involves ascertaining whether a Treasury future is too high or too low relative to the deliverable Treasury note or bond.

In 10-year equivalent terms, hedge funds have amassed a short position of nearly six million contracts, while asset managers are net long by a similar amount.