NEW YORK, Dec 18 (Reuters) - Investors turned slightly more bearish on U.S. government debt in the latest week, ahead of the Treasury selling $99 billion of Treasury notes, a survey released on Tuesday showed.
The share of investors who were “short”, or holding less Treasuries than their benchmarks, on Monday rose to 21 percent from 19 percent the previous week, J.P. Morgan Securities said in its weekly Treasury client survey.
Investors typically reduce their bond holdings to make room for new supply.
The level of short positions in the previous survey conducted last Monday had risen to 19 percent from 17 percent as the Treasury sold $66 billion of new debt last week.
This week, the Treasury sold $35 billion of two-year notes on Monday and $35 billion of five-year notes on Tuesday. It will sell $29 billion of seven-year notes on Wednesday, followed by $14 billion of reopened Treasury inflation-protected securities on Thursday.
The share of investors surveyed on Monday who said they were “neutral” on U.S. government debt, or holding Treasuries equal to their portfolio benchmarks, fell to 64 percent from 66 percent the previous week.
The share of investors who said they were “long” Treasuries, or holding more government debt than their portfolio benchmarks, was unchanged from the previous week at 15 percent.
Within the survey, active clients, including market makers and hedge funds, who are viewed as taking on speculative bets in Treasuries, sharply reduced their neutral stance.
The share of neutrals among active clients fell to 38 percent from 61 percent, while the share of shorts rose to 46 percent from 31 percent. The share of longs rose to 15 percent from 8 percent the previous week.