May 30, 2012 / 2:42 PM / 5 years ago

Investors slightly gloomier on Treasuries - survey

NEW YORK, May 30 (Reuters) - Investors were slightly less optimistic on the outlook for U.S. Treasury debt in the latest week, although with benchmark yields trading at the lowest in at least 60 years, most were taking a neutral position, a survey showed on Wednesday.

The share of investors who said they were long U.S. government debt, or holding more Treasuries than their portfolio benchmarks on the U.S. bond market, eased to 17 percent on Tuesday from 21 percent in the previous week, J.P. Morgan Securities said in a weekly Treasury client survey.

The number of investors who said they were neutral, or holding Treasuries equal to their portfolio benchmarks, rose to 66 percent from 62 percent last week.

The share of investors who were short on Monday, or owning fewer Treasuries than their benchmarks, was unchanged from the previous week at 17 percent, J.P. Morgan said.

Fears of contagion from the European debt crisis, particularly in Greece and Spain, has fueled safe-haven buying of U.S. government debt in recent weeks, and on Wednesday pushed benchmark yields to the lowest in at least 60 years.

Investors are mixed on whether yields can fall much further from current rock-bottom levels, and the increase in neutral positions this week takes the survey back to the level of neutrals last seen on May 7, J.P. Morgan said.

Benchmark 10-year notes on Wednesday were trading 30/32 higher in price to yield 1.65 percent, down from 1.75 percent late Tuesday.

Among active clients and including market makers and hedge funds, which are seen to take on speculative bets in Treasuries, the share of those who said they were long Treasuries dipped to 8 percent from 15 percent in the prior week.

The share of active clients who owned fewer Treasuries than their benchmarks fell to 15 percent from 23 percent in the previous week.

The percentage of active traders with neutral weightings in Treasuries rose to 77 percent from 62 in the prior week, J.P. Morgan said.

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