JPMorgan Chase has recommended taking profits on tactical short positions in 2-year U.S. Treasury notes, stating that yields have little room left to rise further.

"Yields on 2-year Treasuries are currently at their highest level since late January and near the top of the trading range observed since last summer. We believe there is limited scope for further increases in the near term," strategists including Jay Barry wrote in a report. This outlook is particularly influenced by the upcoming U.S. employment data scheduled for release on Friday.

"The firm expects nonfarm payrolls to increase by 30,000 in February, slightly below the market consensus of 55,000. At the same time, the unemployment rate is projected to rise by 0.1 percentage point to 4.4%."

Oil prices have climbed nearly 20% over the past two weeks, leading to reduced expectations for the number of Federal Reserve interest rate cuts and a corresponding rise in real yields.

"Risks to oil prices remain tilted to the upside, and any significant surge could adversely affect economic growth. As a result, we are exiting our short positions on 10-year Treasury Inflation-Protected Securities with a modest profit."