Bloomberg News

Treasuries Investors Boost Bullish Wagers, JPMorgan Says

July 24, 2012

Treasuries investors raised bets the securities will gain in price, becoming the most bullish since February, according to a survey by JPMorgan Chase & Co.

The proportion of net longs, or bets the securities will rise versus those they will fall, increased to 13 percentage points in the week ending yesterday. The percentage of outright longs rose to 26 percent from 19 percent.

“There is still ongoing concern around Europe,” Srini Ramaswamy, a JPMorgan strategist in New York, said in a telephone interview. “Positions appear stretched and are too long. You have to be tactical about the market and, in a world where positions seem a little too long, a tactical pullback is likely.”

The percentage of outright shorts, or bets the securities will fall in value, was unchanged at 13 percent.

Investors cut neutral bets to 60 percent from 68 percent. Neutrals rose to 74 percent in the week ending June 25, the highest level of outright neutrals since October.

The yield on the benchmark U.S. 10-year note rose one basis point, or 0.01 percentage point, to 1.44 percent at 8:16 a.m. in New York. The yield touched a 2012 high of 2.4 percent on March 20 and reached a record low 1.396 percent yesterday.

JPMorgan doesn’t disclose the number of clients in the survey.

To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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