JPMorgan Chase & Co. has ditched a bullish tactical view on Treasuries after a series of US economic data releases came in stronger than expected.
(Bloomberg) — JPMorgan Chase & Co. has ditched a bullish tactical view on Treasuries after a series of US economic data releases came in stronger than expected.
The bank’s fixed income strategists are unwinding their long position in five-year Treasuries as “we can no longer justify our tactical long duration view,” a team including Jay Barry wrote in a note to clients.
The shift came as robust US growth and labor data Thursday sparked a global bond selloff as traders bet the Federal Reserve will have to raise rates two more times this year. The yield on five-year notes has climbed almost 40 basis points this month to trade at its highest since March.
Global Yields Surge as Traders Favor Two More Fed Rate Hikes
“Treasuries have outperformed their underlying drivers, and valuations remain rich,” the strategists said. Investor “positioning is long, indicating there could be risks of long liquidation in the coming days.”
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