* Investors turn net long on longer-dated U.S. bonds
* Active clients most net long since mid-June 2016
NEW YORK, March 7 More investors were bullish on
longer-dated U.S. Treasuries than those who were bearish for the
for first time since Donald Trump's U.S. presidential election
victory that hammered bond markets across the globe in late
2016, J.P. Morgan said on Tuesday.
This reversal came even as Federal Reserve officials ramped
up their rhetoric last week that they were prepared to raise
short-term interest rates at their policy meeting next week.
The share of "long" investors, who said they were holding
more longer-dated Treasuries than their benchmarks, rose to 20
percent in the week to March 6 from 18 percent in the preceding
week, J.P. Morgan showed in its latest Treasury client survey.
J.P. Morgan surveyed clients that include bond fund
managers, central banks and sovereign wealth funds.
The share of "short" investors who said they were holding
less longer-dated U.S. government debt than their portfolio
benchmarks fell to 18 percent from 20 percent from the previous
Since the start of the year, investors have reduced 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
At the end of 2016, expectations on speedy implementation of
these fiscal measures had stoked jitters about a surge in
federal borrowing and inflation.
Long investors outnumbered short investors, or net longs,
for the first time since Oct. 24, 2016. In the latest week, the
net longs were two percentage points, compared with net shorts
of two percentage points in the preceding 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 2.51 percent, up 1
basis point from late on Monday.
The share of "neutral" investors, who said on Monday they
were holding amounts of longer-dated Treasuries that match their
benchmarks, was unchanged at 62 percent, the survey showed.
Active clients that include market makers and hedge funds,
which are seen to take on speculative bets in Treasuries, were
especially bullish on bonds, the latest J.P. Morgan survey
Forty percent of them said they were long, while none of
them said they were short. This net long of 40 percentage points
was the biggest since June 13, 2016.
(Reporting by Richard Leong Editing by W Simon)