October 16, 2018 / 1:18 PM / a year ago

Investors less bearish on Treasuries as yields retreat - survey

NEW YORK, Oct 16 (Reuters) - Bond investors pared their net bearish bets on longer-dated U.S. government debt as 10-year Treasury yields pulled back from 7-1/2 year peaks due to safe-haven demand inspired by a dramatic sell-off in global equities, a J.P. Morgan survey showed on Tuesday.

The margin of investors who said on Monday they were “short,” or holding fewer Treasuries than their portfolio benchmarks, over those who said they were “long” or holding more Treasuries than their benchmarks fell to 4 percent from 11 percent, according to the survey.

A week ago, benchmark 10-year Treasury yields reached 3.261 percent, the highest level since May 2011. They were 3.165 percent in early Tuesday trading, Refinitiv data showed.

Growing Treasury supply, together with worries about rising inflation and a faster pace of interest rate increases from the Federal Reserve, had sparked a stampede from Treasuries two weeks ago before a market recovery last week.

A quarter of investors surveyed said they were short longer-dated bonds, down from 32 percent a week earlier.

The share of investors who said they were long Treasuries stood at 21 percent for a second week.

Those who said they were neutral or were holding Treasuries equal to their portfolio benchmarks increased to 54 percent from 47 percent.

Reporting by Richard Leong Editing by Susan Thomas

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