NEW YORK, April 4 Investors raised their bearish
bets on longer-dated U.S. Treasuries as a rally in the bond
market pushed benchmark yields to their lowest since February,
J.P. Morgan's latest Treasury client survey showed on Tuesday.
Investors had shifted money into Treasuries from stocks and
other risky assets in recent weeks on concerns that U.S.
President Donald Trump and top Republican lawmakers may struggle
to pass fiscal stimulus policies.
Following the Republicans' failure to repeal Obamacare in
the House of Representatives, investors have worried the setback
could hamper efforts for a broad restructuring of the tax code,
including cuts to the rates paid by corporations.
The anticipated tax cuts had underpinned the surge in bond
yields and stock prices following Trump's win in the Nov. 8
Some analysts said the bond market rally may be overdone.
The share of "short" investors who said they were holding
fewer longer-dated U.S. government securities than their
portfolio benchmarks rose to 23 percent in the week to April 3
from 20 percent in the prior week, J.P. Morgan's survey showed.
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 remained at
16 percent for a second week.
Short investors outnumbered long investors by 7 percentage
points, the most in five weeks. A week ago, they were net shorts
by four points.
On Tuesday, the yield on the benchmark 10-year Treasury
hit a session low of 2.314 percent, its least since
Feb. 24, according to Reuters data.
The share of "neutral" investors who said they were holding
amounts of longer-dated Treasuries that match their benchmarks
declined to 61 percent from 64 percent last week, the survey
Active clients, which included market makers and hedge
funds, stuck to their positions from a week ago, the J.P. Morgan
Eighty percent of them said they were neutral. None of them
said they were short, while 20 percent of them said they were
(Reporting by Richard Leong Editing by W Simon)