Bullish US bond bets highest since June ’09-survey

NEW YORK, Oct 26 (BestGrowthStock) – More investors turned bullish
on U.S. Treasuries in the latest week as they widely expect the
Federal Reserve will buy more government debt in a bid to help
a sluggish U.S. economy, a survey released on Tuesday showed.

The gap between the share of investors who said they are
long Treasuries and the share of investors who said they are
short Treasuries grew to 29 percent on Monday, its widest level
since June 29, 2009, JPMorgan Securities said.

The Treasuries market has rallied since late August as Fed
officials expressed support for a second round of quantitative
easing in the form of more bond purchases, known as QE2.

Analysts expect the U.S. central bank could buy up to $2
trillion in government debt in the coming months to hold down
long-term interest rates with the goal to stimulate borrowing
and investments.

Fed policy-makers will convene next Tuesday and Wednesday.

In anticipation of QE2, the share of investors who said
they are long, or owning more Treasuries than their portfolio
benchmarks, climbed to 41 percent on Monday, up from 37 percent
a week earlier, JPMorgan said.

According to the latest JPMorgan survey, the share of
investors who were short, or owning less Treasuries than their
portfolio benchmarks, held steady at 12 percent.

In the latest week, the share of investors with a neutral
stance, or owning Treasuries equal to their portfolio
benchmarks, fell to 47 percent from 51 percent last week.

The share of long bets made up by active clients, including
market makers and hedge funds, held at 5 percent.

The amount of active clients who were neutral was 6
percent, unchanged from the prior week, while the share of
active clients who were short has been stuck at zero.

Early Tuesday, the yield on benchmark 10-year Treasury
notes (US10YT=RR: ) rose 5 basis points to 2.62 percent, the
highest since Sept 21 when Fed policy-makers last met and
hinted they were open to QE2.
(Reporting by Richard Leong; Editing by Padraic Cassidy)

Bullish US bond bets highest since June ’09-survey