Clients Are The Most Net Short Treasuries Since 2006, JPMorgan Warns

We have shown the surge in short positioning that CFTC exposes via its Commitment of Traders data that has begun to see some covering; but despite Citi's protestation that the recent rally in bonds 'must' have cleared out the short base and squared positions, the truth is - the Treasury market is dominated by more than just futures and institutional clients have not been this short Treasuries since 2006. As JPMorgan's Client Survey exposes, as of the end of last week, active clients were adding to shorts... which could be a problem as the last time all clients were this net short, bond yields collapsed in the next few months...



So while we know that banks have massive flattener positions on, they continue to push the idea of steepeners and bearish bets to their clients... perhaps it is time to do as they 'do', not as they 'say'.


Chart: Bloomberg