Investors most net long on longer-dated U.S. bonds in a month: JPM

October 25, 2016 9:51 AM EDT

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NEW YORK (Reuters) - Investors' relative preference for longer-dated U.S. Treasuries improved to its strongest level in a month after the European Central Bank signaled it was not in a rush to reduce its monthly bond purchases, according to a J.P. Morgan survey released on Tuesday.

There had been speculation the ECB would consider beginning to taper purchases for its 1 trillion-plus euro stimulus program, which could end as early as March 2017.

ECB President Mario Draghi said last week such a move was not discussed at the bank's policy meeting and hinted it was open to more stimulus to help the euro zone economy.

The share of "long" investors who said on Monday they were holding more longer-dated U.S. government debt than their portfolio benchmarks rose to 23 percent from 21 percent the previous week, J.P. Morgan's survey showed.

The share of "short" investors, who said they were holding fewer longer-dated Treasuries than their benchmarks, was unchanged from last week at 18 percent, J.P. Morgan said.

Long investors outnumbered short investors, or net longs, by 5 percentage points, up from 3 points last week. This was the most net longs since Sept. 26, the report said.

The share of "neutral" investors, who said they were holding amounts of longer-dated Treasuries that match their benchmarks, fell to 59 percent from 61 percent the prior week.

In early Tuesday trading, the benchmark 10-year Treasury note yield was 1.779 percent, up over 1 basis point from late on Monday.

(Reporting by Richard Leong; Editing by Meredith Mazzilli)



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