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Investors grow bullish on longer-dated US Treasuries: JPM

[NEW YORK] The number of investors who are bullish on longer-dated US Treasuries rose after a mildly disappointing payrolls report in April supported the view the Federal Reserve will not raise interest rates in June, according to a JP Morgan survey released on Tuesday.

The share of "long" investors who said on Monday they were holding more longer-dated US government debt than their portfolio benchmarks rose to 20 per cent from 14 per cent the previous week, JP Morgan's latest survey showed.

The share of "short" investors, who said they were holding fewer longer-dated Treasuries than their benchmarks, fell to 20 per cent from 22 per cent, JP Morgan said.

The share of "neutral" investors, who said they were holding amounts of longer-dated Treasuries that match their benchmarks, fell to 60 per cent from 64 per cent.

The government said last Friday US employers added 160,000 workers in April, the smallest monthly gain in seven months. Analysts polled by Reuters had forecast a 202,000 increase.

The weaker-than-expected hiring last month led most top Wall Street firms to expect the Fed will leave rates unchanged at its June 14-15 policy meeting, a Reuters poll showed.

The report showed a steady 0.3 per cent rise in average hourly earnings, which offset some worries about the drop in hiring.

In early Tuesday trading, the 10-year Treasury yield was little changed at 1.758 per cent. It has fallen nearly six basis points so far in May.

REUTERS