June 5, 2012 / 2:26 PM / 5 years ago

Investors less optimistic on Treasuries-JPM survey

NEW YORK, June 5 (Reuters) - Investors were less optimistic on the outlook for U.S. Treasury debt in the latest week, although with benchmark yields trading not far off record lows, most maintained a neutral position, a survey showed on Tuesday.

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 11 percent on Monday from 17 percent in the previous week, J.P. Morgan Securities said in a weekly Treasury client survey.

The survey showed the fewest outright longs since Aug. 29, J.P. Morgan said.

The number of investors who said they were neutral, or holding Treasuries equal to their portfolio benchmarks, rose to 72 percent from 66 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.

Data showing tepid jobs growth in the U.S. last month fueled safe-haven buying of Treasuries on Friday, pushing benchmark 10-year note yields to a record low of 1.44 percent. General worries about a global economic slowdown and fears of the fallout from Europe’s debt crisis have also driven recent buying of U.S. government debt.

Benchmark 10-year notes on Thursday were trading 9/32 lower in price to yield 1.55 percent, up from 1.52 percent late Monday.

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 zero from 8 percent in the prior week.

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

The percentage of active traders with neutral weightings in Treasuries was steady on the week at 77 percent, J.P. Morgan said. (Reporting by Chris Reese; Editing by Chizu Nomiyama)

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