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U.S. longer-dated bond net shorts lowest in two months -JPMorgan
June 20, 2017 / 2:25 PM / 6 months ago

U.S. longer-dated bond net shorts lowest in two months -JPMorgan

    NEW YORK, June 20 (Reuters) - The margin of investors who
are bearish on longer-dated U.S. Treasuries over those who are
bullish narrowed to its tightest since mid-April, J.P. Morgan's
latest Treasury client survey showed on Tuesday.
    Investors scaled back their bearish bond bets as the recent
softening in inflation data has raised doubts whether the
Federal Reserve would raise interest rates again by year-end
after it raised them last week, analysts said.
    Short investors, or those who said they were holding fewer
longer-dated Treasuries than their benchmarks, outnumbered long
investors who said they were holding more longer-dated bonds
than their benchmarks by 7 points on June 19. This resulted in
the fewest net shorts since April 17, J.P. Morgan said.
    Last week, net shorts totaled 18 points, which was the most 
since Dec. 12, 2016, J.P. Morgan said.
    On Tuesday, the yield on the benchmark 10-year Treasury note
 was 2.177 percent, down from 2.207 percent a week
ago, according to Reuters data.
    The drop in longer-dated yield followed the Fed's widely
expected increase of key overnight borrowing costs by a quarter
point to 1.00-1.25 percent last Wednesday, marking the fourth
rate hike since December 2015.      
    J.P. Morgan surveyed clients that included bond fund
managers, central banks and sovereign wealth funds. Their active
clients included market makers and hedge funds.
    Below is the latest J.P. Morgan survey of its Treasury

 All clients     Long    Neutral  Shorts   Net
 June 19             18       57       25          -7
 June 12              9       64       27         -18
 Active clients                                      
 June 19             20       60       20           0
 June 12             10       40       50         -40
 *positive value denotes net long, negative value denotes net

 (Reporting by Richard Leong; Editing by Andrea Ricci)

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