January 18, 2017 / 3:37 PM / 8 months ago

Investors pare net shorts on U.S. Treasuries -JPM

NEW YORK, Jan 18 (Reuters) - The margin on bearish bets on longer-dated U.S. Treasuries over bullish positions shrank further as investors reconsidered how many of President-elect Trump’s economic policies will be enacted in the coming months, J.P. Morgan said on Wednesday.

The share of “long” investors who said they were holding more longer-dated U.S. government debt than their portfolio benchmarks was 16 percent for a second week, J.P. Morgan showed in its latest Treasury client survey.

The firm’s survey of clients includes bond fund managers, central banks and sovereign wealth funds.

The share of “short” investors, who said they were holding fewer longer-dated Treasuries than their benchmarks, fell to 20 percent from 23 percent in the previous 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.

The absence of details from Trump on the tax cuts, infrastructure spending and deregulation he campaigned on has led some investors to buy longer-dated Treasuries to pare their bearish bets on them.

Early on Wednesday, the 10-year yield was 2.37 percent, up over 4 basis points from late on Tuesday.

Short investors outnumbered long investors, or net shorts, by four percentage points, which was the smallest net short since late November. That was down from seven points last week and 28 points on Dec. 12, which was the biggest such difference since June 28, 2015.

The share of “neutral” investors, who said on Tuesday they were holding amounts of longer-dated Treasuries that match their benchmarks, rose to 64 percent from 61 percent, the survey showed. (Reporting by Richard Leong; Editing by Meredith Mazzilli)

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