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U.S. longer-dated bond net shorts hit 3-month high -JPMorgan
May 9, 2017 / 2:29 PM / 7 months ago

U.S. longer-dated bond net shorts hit 3-month high -JPMorgan

NEW YORK, May 9 (Reuters) - The margin of investors who are bearish on longer-dated U.S. Treasuries over those who are bullish grew to its widest in more than three months following the French presidential run-off on Sunday, J.P. Morgan’s latest Treasury client survey showed on Tuesday.

Centrist Emmanuel Macron’s widely expected win over anti-European Union rival Marine Le Pen caused investors to reduce their safe-haven holdings of government bonds, propelling benchmark U.S. yields to a five-week high on Tuesday.

Uncertainty over the demand for this week’s $62 billion bond supply for the May quarterly refunding also weighed on investor sentiment on longer-dated Treasuries, analysts said.

The share of “short” investors who said they were holding fewer longer-dated U.S. government securities than their portfolio benchmarks rose to 27 percent from 25 percent in the prior week, according to the J.P. Morgan survey.

J.P. Morgan surveyed clients including 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 held at 16 percent for a second week.

Short investors outnumbered long investors by 11 points, the most since the week of Jan. 30. A week ago, they were net short by nine points.

On Tuesday, the yield on the benchmark 10-year Treasury was 2.405 percent, compared with 2.296 percent a week ago, according to Reuters data.

Active clients, which included market makers and hedge funds, reduced their bullishness on longer-dated Treasuries in the latest week, the J.P. Morgan survey showed.

Thirty percent of those clients said they were long, but 20 percent said they were short, up from 10 percent a week ago, while 50 percent said they were neutral, down from 60 percent a week ago. (Reporting by Richard Leong; Editing by Meredith Mazzilli)

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