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Net shorts on U.S. longer-dated bonds rise -JPMorgan
October 24, 2017 / 1:17 PM / in a month

Net shorts on U.S. longer-dated bonds rise -JPMorgan

    NEW YORK, Oct 24 (Reuters) - The margin of investors who
said they had fewer longer-dated Treasuries than their
benchmarks over those who held more longer-dated bonds than
their benchmarks grew in the latest week, JPMorgan Chase & Co.'s
latest client survey showed Tuesday.
    Investors reduced their holdings of longer-dated government
debt on speculation President Donald Trump might nominate a
Federal Reserve chair who favors a faster pace of interest rate
increases, analysts said.
    There were also renewed worries about a jump in government
borrowing after the Senate passed a budget resolution last
Thursday. The move has been seen as paving the way for Trump and
the Republican-controlled Congress to enact a tax-cut package
that would widen the federal deficit by up to $1.5 trillion over
the next decade.
    The share of investors who said they were "short"
longer-dated Treasuries rose to 40 percent from 30 percent on
Oct 16. 
    The share of them who said they were "long" slipped to 13
percent from 15 percent last week.
    The net shorts rose to 27 percent from 15 percent the prior
week, JP Morgan said.
    Among active clients which include market makers and hedge
funds, 40 percent said they were short longer-dated U.S. bonds,
up from 10 percent last week, while 10 percent of them said they
were long, unchanged from a week earlier. 
    At 9:01 a.m. (1301 GMT), the 10-year yield was
2.410 percent, up 3.5 basis points from late on Monday. Earlier
Tuesday, it reached 2.414 percent, the highest level since May
11, Reuters data showed.
    A week ago, the 10-year yield closed at 2.298 percent.
    JPMorgan surveyed clients including bond fund managers,
central banks and sovereign wealth funds, as well as market
makers and hedge funds.
    The chart below displays the latest survey results of
JPMorgan's Treasury clients:

  All clients     Long   Neutral  Shorts     Net
                                           Position
 Oct. 23           13      47       40       -27
 Oct. 16           15      55       30       -15
 Oct. 10           15      43       42       -27
 Oct. 2            5       51       44       -39
 Sept. 25          11      59       30       -19
 Sept. 18          16      61       23        -7
 Sept. 11          9       64       27       -18
 Active clients                                
 Oct. 23           10      50       40       -30
 Oct. 16           10      80       10        0
 Oct. 11           10      40       50       -40
 Oct. 2            0       30       70       -70
 Sept. 25          20      50       30       -10
 Sept. 18          10      70       20       -10
 Sept. 11          0       90       10       -10
 * NOTE: Positive value denotes net long, negative value denotes
net short

    

 (Reporting by Richard Leong; Editing by Chizu Nomiyama)
  

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