Data from the U.S. Commodity Futures Trading Commission (CFTC) reveals that asset managers increased their net long exposure in select U.S. Treasury futures contracts prior to the Treasury Department's unexpected announcement to expand the scale of long-dated buybacks, while speculative traders reduced their corresponding positions.

According to CFTC figures for the week ending August 18, asset managers boosted their net long positions in both 5-year and 10-year Treasury futures. Specifically, net longs in 10-year Treasury futures rose by approximately 31,000 contracts, while 5-year futures saw an increase of about 43,000 contracts.

However, the positioning shift was not uniform across all maturities, as asset managers trimmed their net longs in 2-year Treasury futures by roughly 60,000 contracts.

In contrast to the moves by asset managers, leveraged funds and other speculative players further extended their net short positions in certain longer-duration Treasury futures.

Overall, prior to the Treasury's buyback expansion announcement, the market displayed a clear divergence: long-term investors were adding to positions in some longer-tenor contracts, while speculative capital leaned bearish.

The Treasury Department announced on August 19 that it would at least double the size of its liquidity support buyback operations for 10- to 30-year nominal notes, raising the maximum size per operation from $2 billion to at least $4 billion, with operations scheduled to run from September 9 to November 4.

The unexpected move came against a backdrop of persistently rising long-term Treasury yields. Before August 19, the 30-year yield had climbed to 5.34%, its highest level since 2007. Following the buyback announcement, long-end yields initially pulled back noticeably but later resumed their upward trajectory, signaling lingering market skepticism about whether the buyback measures can effectively alleviate supply-demand pressures in the Treasury market over the longer term.