Investors cut long bets in US bonds: JP Morgan

[NEW YORK] Bond investors scaled back their bullish, or long, bets on longer-dated US Treasuries after their prices jumped, and benchmark yields fell to their lowest in 3-1/2 years last week, according to a JP Morgan survey released on Wednesday.

Anxieties over the global economy and oil prices tumbling to 12-year lows drove a safehaven dash into US government debt last week. On Thursday, the yield on benchmark 10-year Treasury notes fell to 1.53 per cent, the lowest since Sept 2012.

Some analysts reckoned the scramble into Treasuries was overdone as data signaled the US economy remains on track for modest growth in 2016.

According to the JP Morgan survey, the share of "long" investors who said on Tuesday they were holding more longer-dated US government debt than their portfolio benchmarks fell to 16 per cent from 23 per cent the prior week.

The share of "short" investors who said they were holding fewer longer-dated Treasuries than their benchmarks fell to 18 per cent from 23 per cent last week.

The share of short investors was greater than the share of long investors by 2 percentage points. Last week, the share of short investors matched the level of long investors, JP Morgan said.

The share of "neutral" investors who said they were holding amounts of longer-dated Treasuries that match their benchmarks rose to 66 per cent from 54 per cent the previous week. This was the highest level of neutral investors since Dec 7.

REUTERS