NEW YORK, April 25 The margin of investors who
are bearish on longer-dated U.S. Treasuries over those are
bullish jumped to a two-month high after a tightly contested
first round of the French presidential election on Sunday, J.P.
Morgan's latest Treasury client survey showed on Tuesday.
U.S. government debt had enjoyed safe-haven bids partly
among investors who were nervous far-right Marine Le Pen and
far-left Jean-Luc Melenchon, who have anti-EU stances, would
face each other in a run-off.
On Sunday, centrist Emmanuel Macron and Le Pen were the top
two vote-getters. Recent polls have shown Macron will beat Le
Pen in the two-person race on May 7.
The first-round election results caused a rally in the euro
and European stocks while sparking sales in Treasuries, the yen
and other safe-haven assets on Monday.
The share of "short" investors who said they were holding
fewer longer-dated U.S. government securities than their
portfolio benchmarks rose to 22 percent from 18 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 fell to 14
percent from 18 percent.
Short investors outnumbered long investors by eight points,
the most since the week of Feb. 21. A week ago, they equaled
On Tuesday, the yield on the benchmark 10-year Treasury
rose to 2.31 percent from a five-month low of 2.17
percent set a week ago, according to Reuters data.
On the other hand, active clients, which included market
makers and hedge funds, remained overall bullish on longer-dated
Treasuries in the latest week, the J.P. Morgan survey showed.
Thirty percent of them said they were long; 10 percent of
them said they were short and 60 percent of them said they were
neutral, same as a week earlier.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)