October 30, 2018 / 2:04 PM / 10 months ago

Investors most neutral on Treasuries since July amid steady yields - survey

NEW YORK, Oct 30 (Reuters) - Bond investors turned the most neutral on longer-dated U.S. government debt since July as Treasury yields stabilized following sharp swings earlier this month, a J.P. Morgan survey showed on Tuesday.

The share of investors who said on Monday they were neutral, or holding Treasuries equal to their portfolio benchmarks, increased to 58 percent, the highest level since July 23. This compared with 51 percent a week earlier, J.P. Morgan said.

On Oct. 9, benchmark 10-year Treasury yields reached 3.261 percent, the highest since May 2011. They were 3.111 percent in early Tuesday trading, Refinitiv data showed.

The margin of investors who said on Monday they were “short,” or holding fewer Treasuries than their portfolio benchmarks, over those who said they were “long” or holding more Treasuries than their benchmarks, rose to 8 percent from 3 percent, according to the survey.

Three weeks ago, investors dumped Treasury holdings on worries about growing Treasury supply, rising inflation and a faster pace of interest rate increases from the Federal Reserve, propelling a surge in bond yields.

Subsequently, the bond market recovered on safe-haven demand stemming from a global stock market rout.

A quarter of investors surveyed said they were short longer-dated bonds, compared with 26 percent a week ago.

The share of investors who said they were long Treasuries fell to 17 percent from 23 percent.

Reporting by Richard Leong; Editing by Bernadette Baum

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