Every Tuesday morning the note market gets a wiggle on the JP Morgan Client Survey. Today's report was no exception. The results were: Longs 4 vs 2 (2!!!) last week. Shorts 11 vs 13 and Neutral (whatever that is) unch at 85.
I would imagine that the metric probably is "to benchmark." The day trading community opts to interpret this as "The market is not long." My take is- they are ALL longs! As a follow up, "Who are these guys?" The bond ownership community's relevance is defined by its "fade factor."
Any who... the pundocracy will have until Friday to hype QE3 and Op Twist worship. Neither policy outcome (both unlikely in our opinion) jives with the Survey results. The UK Debt Dept. has decided to extend duration while the rate structure permits. 40 and 50 year Gilts should emerge. 50 year US paper would also be worth considering. The Fed should not be "twisting" at the time.
Today we will get a peek at the Street's interest in a "no coupon" 2 year note. Last month, the auction tailed a bip at 4i.75. The market has calmed from 16 low back to 21 but I still have no bid in front of 25.