NEW YORK Oct 4 Investors' relative preference
for longer-dated U.S. Treasuries fell to a five-month low in
advance of the release of the government's jobs report on
Friday, according to a J.P. Morgan survey released on Tuesday.
A solid figure on employment growth in September likely will
reinforce expectations that the Federal Reserve would raise
interest rates by year-end, analysts and traders said.
The share of "short" investors who said on Monday they were
holding fewer longer-dated U.S. government debt than their
portfolio benchmarks rose to 25 percent from 20 percent the
previous week, J.P. Morgan's survey showed.
The share of "long" investors, who said they were holding
more longer-dated Treasuries than their benchmarks, fell to 18
percent from 25 percent last week, J.P. Morgan said.
Short investors outnumbered long investors, or net shorts,
by 7 percentage points, compared with last week when there was a
net long of 5 percentage points. This was the most net shorts
since May 2, the J.P. Morgan report said.
The share of "neutral" investors, who said they were holding
amounts of longer-dated Treasuries that match their benchmarks,
rose to 57 percent from 55 percent the prior week.
Benchmark 10-year Treasury yield has risen from its record
low of 1.321 percent set on July 6, which stemmed from a flood
of safe haven buying of U.S. government debt in reaction to
Britain's surprise vote to leave the European Union on June 23,
according to Reuters data.
No imminent sign on further bond purchases from the European
Central Bank and a change in policy stance from the Bank of
Japan also stoked selling in longer-dated Treasuries during the
The rose to 1.655 percent earlier Tuesday, which
was its highest level in nine trading sessions.
Economists polled by Reuters forecast U.S. employers likely
added 175,000 workers in September, more than the 151,000 hired
in August. They projected the jobless rate would hold at 4.9
U.S. interest rates futures on Tuesday suggested traders saw
about a 63 percent chance the Fed would raise interest rates at
its Dec. 13-14 policy meeting, according to CME Group's FedWatch
(Reporting by Richard Leong; Editing by Bill Trott)