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U.S. longer-dated bond net shorts hold at 2-month high before Fed meeting -JPMorgan
May 2, 2017 / 2:46 PM / 7 months ago

U.S. longer-dated bond net shorts hold at 2-month high before Fed meeting -JPMorgan

NEW YORK, May 2 (Reuters) - The margin of investors who are bearish on longer-dated U.S. Treasuries over those who are bullish held at a two-month high before the Federal Reserve’s two-day policy meeting, J.P. Morgan’s latest Treasury client survey showed on Tuesday.

The U.S. central bank was widely expected to leave its interest rate target in a range of 0.75-1.00 percent after it raised it to that level in March.

Fed policymakers’ upcoming meeting will end on Wednesday.

The share of “short” investors who said they were holding fewer longer-dated U.S. government securities than their portfolio benchmarks rose to 25 percent from 22 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 rose to 16 percent from 14 percent.

Short investors outnumbered long investors by nine points, the most since the week of Feb. 21. A week ago, they were net short by eight points.

On Tuesday, the yield on the benchmark 10-year Treasury was 2.313 percent, compared with 2.329 percent a week earlier, according to Reuters data.

On the other hand, active clients, which included market makers and hedge funds, remained overall bullish on longer-dated Treasuries for a third straight week, the J.P. Morgan survey showed.

Thirty percent of them said they were long, 10 percent said they were short and 60 percent said they were neutral, the same as a week ago. (Reporting by Richard Leong; Editing by Meredith Mazzilli)

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