Hedge fund managers are the most bearish on 10-year U.S. Treasurys in 16 months, according to a new survey, as they position for a winding down of the Federal Reserve’s bond buying program.
Of the managers polled, 48.3 percent were negative in their outlook for 10-year debt in July, up 6 percentage points from the previous month, according to a monthly survey by TrimTabs/BarclayHedge published late Wednesday. The survey, which was conducted July 16 and July 19, polled 95 fund managers.
Earlier this month, 10-year Treasury yields, which move in the opposite direction to prices, spiked to 2.73 percent – the highest since August 2011 – after the country’s June employment report showed signs of solid improvement in the labor market, raising expectations for Fed tapering. Yields have since edged lower, currently trading around 2.58 percent.
The survey findings, however, contradict a recent Bank of America Merrill Lynch report that said hedge funds have been “aggressively” buying 10-year U.S. Treasurys in the week to July 22.
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