US Rates Watch: Flows fight positioning

Research evidence excerpt

US Rates Watch: Flows fight positioning

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US Rates Watch

Flows fight positioning

Strong demand despite short positioning 08 June 2026

Positioning and flows are increasingly misaligned. CTA shorts dominate and are

concentrated in the front end, reinforcing a bearish positioning bias into CPI and the Rates Research

United StatesJune FOMC. A more data dependent Fed than market expects can keep pressure on

front-end yields and support further flattening.

Meghan Swiber, CFA

At the same time, demand is strongly dominated by asset managers. Active funds are RatesBofASStrategist

rotating back into USTs from IG & MBS. Fixed income funds are seeing strong inflows. meghan.swiber@bofa.com

Foreign flows add another layer. Official investors continue to reduce UST holdings, but Eleanor Xiao

Rates Strategist

private demand remains firm and broader fund inflows are absorbing supply. BofAS

eleanor.xiao@bofa.com

Exhibit 1: Curve-o-meter US Rates Research

Rates to trade like positioning is modestly short & neutral curve BofAS

See Team Page for List of Analysts

CFTC: Commodities Futures Trading

Commission

CTA: Commodity Trading Adviser

FV: Treasury 5Y contract

ITM: In the Money

MBS: Mortgage Backed Securities

OTM: Out of the Money

US: Treasury 20Y contract.

Source: BofA Global Research, Note: dial shows duration = average 5y percentiles of CTA positioning + net OTM position implied from

futures positioning proxy + CFTC non-comm ex LF + fund regression duration beta. Curve = avg 5y percentiles of CTA betas + futures UST: Treasury Security

positioning proxy + fund regression curve beta

BofA GLOBAL RESEARCH SF: SOFR Futures

Strong bias to selloff TY: Treasury 10Y contract

Shorts continue to dominate across the curve and are in the money while longs are