Commercials have a yield spread on in the 2-year and 10-year bonds. Basically, they are betting that either the 2-year will drop in price, i.e., short interest rates will go up, or that the 10-year will rise in price, meaning rates will go down. In each case, trend following funds have the opposite position. In the 30-year market, something else is afoot, for the commercials are considerably long, against both the funds and the smaller speculators.
Yesterday, fears of unresolved, possibly insoluble problems in the Euro zone, Portugal and Greece in particular, sent US bonds down sharply, breaking through trend lines and looking short term bearish indeed. As we all know, longer term the issues will be higher interest rates, which favor bankers and retirees, vs jobs. While rates may not remain at the current "We are paying you to borrow, if you count inflation into the mix" low rates, it is hard to see the Fed raising rates a large amount though some increase should happen soon. That need not increase the cost of borrowing, given the inordinate spreads the banks now enjoy. We shall see whether excessive greed is displayed by bankers and whether the regulators, many from Goldman Sachs, will regulate or ignore.