by Marc Chandler
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Speculators made several significant position adjustments in the CFTC reporting period ending 19 July.
Swiss Franc
Speculators reduced their long Swiss Franc position from 6.7K contracts to 4.7K contracts (against USD). The 2K was certainly smaller than the increase of 15K shorts in the euro (against USD)
Euro
The euro bears added to their gross short position for the fourth consecutive week and for the ninth week in the past ten. The 16.2k contract increase lifted the gross short position to 211.5k contracts, the largest since the first week of the year.
Sterling
Even before the poor flash UK PMI readings, speculators in the futures market slashed gross long sterling positions. The 12k-contract liquidation brought the gross long position to 28.0k contracts. The gross short position edged 2.3k contracts higher to 102.3k. The net short speculative position of 74.4k contracts, increased by 14.3k contracts on the week and is at the highest level since mid-June.
More Bullish on Dollar and on Dollar-Bloc currencies
Speculators added to their gross long Australian dollar position by 15.7k contracts. It was the fourth consecutive weekly increase. The bears covered 1.5k gross short contracts, leaving 28.2k contracts. The net long position doubled to 33.4k contracts from 16.2k. At the end of June it stood at net short 7k contracts.
The pattern that emerged in the previous report continued with this one. Speculators are more bearish the majors and more bullish the dollar-bloc and Mexican peso.
Previously this was evident in the adjustments of both gross long and gross short positions. In the most recent period it was manifest only in the gross short positions. Speculators added to gross short positions in the euro, yen, sterling, and the Swiss franc. They reduced their gross short exposures to the Canadian, Australian and New Zealand dollars, and the Mexican peso.
Treasuries
For the fourth week in a row speculators reduced gross long and gross short positions in the 10-year Treasury notes. The bull liquidated 55k long contracts, leaving 592.6k. The bears covered 33k gross short contracts to 483.2k. The net position fell to 109.4k from 131.4k contracts.
Crude Oil
In contrast, the bulls and bears added to their exposure to light sweet crude oil futures. The gross long position rose 9.4k contracts to 525.6k, while the gross short position increased by 14.6k contracts to 236k. Despite more longs and shorts, the net position fell 5.2k contracts to 289.6k.
| 19-Jul | Commitment of Traders | |||||
| Net | Prior | Gross Long | Change | Gross Short | Change | |
| Euro | -99.0 | -87.7 | 115.8 | 3.9 | 211.5 | 16.2 |
| Yen | 39.4 | 47.5 | 79.9 | -5.5 | 40.5 | 2.7 |
| Sterling | -74.4 | -60.1 | 28.0 | -12.0 | 102.3 | 2.3 |
| Swiss Franc | 4.7 | 6.7 | 23.2 | -0.1 | 18.5 | 1.9 |
| C$ | 22.1 | 17.2 | 43.1 | 3.1 | 21.0 | -1.8 |
| A$ | 33.4 | 16.2 | 61.6 | 15.7 | 28.2 | -1.5 |
| NZ$ | 2.2 | 1.0 | 29.2 | -2.5 | 27.0 | -3.7 |
| Mexican Peso | -39.4 | -37.2 | 24.7 | -4.0 | 64.0 | -1.8 |
| source: CFTC and Bloomberg in thousands of futures contracts) | ||||||
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.
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