NEW YORK May 9 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
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
(Reporting by Richard Leong; Editing by Meredith Mazzilli)