NEW YORK Feb 28 The margin on bearish bets on
longer-dated U.S. Treasuries over bullish positions shrank to
its narrowest level since before Donald Trump's surprise U.S.
presidential win in November, J.P. Morgan said on Tuesday.
Investors have scaled back their bearish bets on bonds as
the Trump administration and the Republican-controlled U.S.
Congress have shared few specifics on their pledges on tax cuts,
looser regulations and infrastructure spending.
At the end of 2016, expectations on speedy implementations
of these fiscal measures had stoked jitters about a spike in
federal borrowing and inflation, which in turn caused a massive
selloff in bond markets around the world.
Investors are awaiting possible details on Trump's plans in
his scheduled speech at 9 p.m. (0200 GMT Wednesday) before a
joint session of Congress.
The share of "short" investors who said they were holding
less longer-dated U.S. government debt than their portfolio
benchmarks fell to 20 percent from 25 percent from the previous
week, J.P. Morgan showed in its latest Treasury client survey.
The firm's survey of clients includes bond fund managers,
central banks and sovereign wealth funds.
The share of "long" investors, who said they were holding
more longer-dated Treasuries than their benchmarks, rose to 18
percent from 16 percent in the previous week.
Some fund managers have renewed their Treasury purchases
since mid-December when the benchmark 10-year yield
hit 2.64 percent, the highest since September 2014.
Early on Tuesday, the 10-year yield was 2.35 percent, down 1
basis point from late on Monday.
Short investors outnumbered long investors, or net shorts,
by two percentage points, which was the smallest net short since
Nov. 7. That was down from nine points last week.
The share of "neutral" investors, who said on Monday they
were holding amounts of longer-dated Treasuries that match their
benchmarks, rose to 62 percent from 59 percent, the survey
(Reporting by Richard Leong; Editing by Meredith Mazzilli)