Negative bets are multiplied by US bonds, as investors’ anxiety around the employment report on Friday, September 5, 2025, is intensifying, which can enhance views on how aggressively the US federal bank will reduce interest rates in September.
The pessimistic disposition was recorded in the latest JPMorgan Treasury customer survey, showing one of the largest weekly shifts to the negative positioning observed in the last five years, which took place in the period until September 2, according to Bloomberg. With fiscal concerns pushing the 30 -year yields to just below 5%, short -term bets are at their highest level since February.
These bets – a divergence from a previous view that tended to a mild Fed and lower returns after a number of weaker economic data – will be tested when the US publishes the employment report. A number that is significantly weaker than the 75,000 jobs awaiting economists would strengthen the case for more interest rates and increase the pressure on negative investors to redefine their position.
“If we get enough negative elements to overturn the situation, we could have a rise in short -term postings,” said Kathryn Kaminsky, head of strategy and portfolio manager at Alphasimplex Group. This “could be a kind of catalyst that will signal that things in the labor market are a little worse than we thought.”
Sloping curve
The gap between yields on short -term and long -term government bonds has been expanded in recent weeks, as investors weigh the data that is delaying the economy over fiscal concerns.
The yields of two -year bonds, which tend to follow the expectations of Fed’s policy on Wednesday, reached the lowest level than in May, after a weaker report on recruitment and redundancies by US employers who forced the traders.
While the chance of reducing 50 base points in September is considered small, traders in the SOFR option has yet returned to compensate for such an outcome in the last week.
The recent downward position, however, suggests that some traders believe that recent data to slow growth are an abnormality, according to Sean Simko, head of the Sei Investments Investments Management.
“A strong number will lead to yields higher, faster than a weak number will push yields lower, unless the number is too weak,” he said.
Meanwhile, long -term returns have moved higher in recent weeks, as investors require increased compensation for government deficits. Trump government costs and tax reducing plans are projected to exacerbate the country’s fiscal position, unless the increase in tariff revenue is maintained, a result that a federal court ruling put into danger last week.
A faster rate reduction rate could mitigate some of these concerns, at least temporarily, if the decline in yields facilitates the US to serve their debt.
However, the number of Friday is the one who will probably determine the course of returns in the coming weeks.
Steven Englander, head of global G-10 currency research on Standard Chartered, said in a note that any number under 40,000 jobs would lead to markets to a 50-point reduction.
“To completely remove a cut from the table, we believe that NFPs should increase to 130,000 or more, with positive revisions,” he said.
Following is a summary of the latest installation indicators across the interest rate market:
Jpmorgan’s Treasury Customer Research
Jpmorgan’s Treasury Customer Research has shown that Shorts are expanding to the highest level from February 3 and are increasing by eight percentage points per week until September 2. The pure long position is now the smallest of February 3.
Asymmetric slope of bond option rights
The asymmetric slope of bond option at the long -term end of the curve continues to favor the Puts, while the front and bottom of the curve favor the calls, indicating that traders pay a higher premium to compensate for a liquidation. The asymmetric slope matches the demand for steeperners, which remains a overcrowded position and the premium on the bond puts against the rest of the curve.