Short-lived U.S. Treasury rebound fails to change bearish sentiment; traders bet yields will continue to climb.

As long-term U.S. Treasury yields hover near 24-year highs, traders are further ramping up short bets against U.S. government bonds, signaling that despite a sharp slowdown in job growth that points to a cooling economy, the market still expects the Treasury selloff to continue. After last Friday's weak jobs data, some traders quickly covered their short positions, driving a brief rebound in Treasuries. But since then, open interest tied to long-term Treasuries has continued to rise, indicating traders are still positioning for further declines in bond prices. As yields climb, open interest in 10-year Treasury futures has increased in 14 of the past 18 trading sessions, a pattern typically associated with rising short positions. Citigroup strategist David Bieber said market positioning in Treasuries remains at "extreme short" levels, indicating a "persistent short bias" is still in place. He said recent trading activity has been driven both by new short positions and by the unwinding of long Treasury positions. These trading signals suggest that Tuesday's move may be just a brief respite in a months-long Treasury slump. Although yields edged lower, 10-year and 30-year Treasury yields remain only slightly below the highs touched on Monday.