Speculators in the futures market
continued to press a bearish view of the US dollar the CFTC reporting week
ending April 19.According
to the Commitment of Traders report, speculators added to their gross long
currency futures position in seven of the eight currencies we track. The
exception was the British pound, where speculators liquidated a minor 1.1k
contracts, leaving them with 32.8k gross
long sterling future contracts.
That said, most gross currency adjustments were small, but again except sterling,
the direction of change in the net positions was consistent--either longer foreign currencies or less short them. There were only two gross position
adjustments we regard as significant, which is change of 10k or more contracts.
The bulls
added 12k euro contracts to their gross long position, lifting it to 101.2k
contracts. The bears
sold into the euro gains and increased their gross
short position by 6.9k contracts. The gross short euro position peaked
last December at 262k contracts. It stood at 148.1k contracts at the end
of the latest reporting period.
The Mexican peso accounts for the second
significant adjustment by speculators. The bears capitulated and covered
about a third of their gross short position (28.8k contracts) to 58.3k.
The gross longs increased by 3.4k contracts (to 43.9k). As a result
of these gross position adjustments, the
net position was reduced to short 14.4k contracts from 46.6k.
We note that although it was a modest
change, speculators increased their gross
and net long yen position to new record levels. The bulls
increased the gross short yen position by 5.6k contracts to 105.7k. The
bears covered less than 100 contracts, leaving 33.8k. These transactions
increased the net long position to 71.9k contracts from 66.2k.
Speculators are net long the yen, the
three dollar-bloc currencies, and the
Swiss franc. Speculators
are net short euro, sterling, and Mexican
pesos. Our hypothesis is that, given the interest rate differentials, the
foreign currency bulls in the yen, and
Swiss franc are more vulnerable than in the dollar-bloc currencies, which are
backed by higher yields. We anticipate that the gross long yen and franc
positions will fall in the next report.
The bears and bulls fought to a draw in
the US 10-year Treasury note futures. Speculators added 10.7k contracts to
their gross long position (to 480k contracts). They also added 10.6k
contracts to their gross short position
(to 504.3k). This produced a
negligible change in the net short position, which stands at 24.3k contracts.
The bearish speculators in the futures
market covered 35.2k gross short light sweet oil futures contracts, reducing
the gross short position to 205.9k
contracts. Bullish speculators added 9.8k contracts to lift their gross long position to 540.0k contracts.
The net long speculative position increased by 45k contracts to 334.2k.
| 19-Apr | Commitment of Traders | |||||
| Net | Prior | Gross Long | Change | Gross Short | Change | |
| Euro | -46.9 | -52.1 | 101.2 | 12.0 | 148.1 | 6.9 |
| Yen | 71.9 | 66.2 | 105.7 | 5.6 | 33.8 | -0.1 |
| Sterling | -55.2 | -51.3 | 32.8 | -1.1 | 87.9 | 2.8 |
| Swiss Franc | 9.4 | 8.2 | 19.9 | 2.4 | 10.4 | 1.2 |
| C$ | 7.3 | 2.4 | 32.5 | 3.5 | 25.2 | -1.4 |
| A$ | 44.1 | 35.1 | 97.5 | 6.7 | 53.4 | -2.3 |
| NZ$ | 5.4 | 4.3 | 22.7 | 1.2 | 17.3 | 0.1 |
| Mexican Peso | -14.4 | -46.6 | 43.9 | 3.4 | 58.3 | -28.8 |
| (CFTC, Bloomberg) Speculative positions in 000's of contracts | ||||||
Disclaimer
Speculators Continued to Reduce US Dollar Exposure at What may be the Bottom
Reviewed by Marc Chandler
on
April 23, 2016
Rating:
Reviewed by Marc Chandler
on
April 23, 2016
Rating:
