by Marc Chandler
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For a period that included a BOJ and FOMC meeting and the US GDP, speculators in the currency futures were unusually quiet. Summer holidays with family may be more important.
Of the 16 gross currency futures speculative positions we track, 12 of them were less than 5k contracts. There was only one gross position adjustment more than 10k
contracts. Euro bears covered 13.2k gross short euro contracts, leaving them with 208.6k. It snapped a five week accumulation run, which is part of a larger streak. It was only the second week since mid-May that gross euro shorts were reduced.
contracts. Euro bears covered 13.2k gross short euro contracts, leaving them with 208.6k. It snapped a five week accumulation run, which is part of a larger streak. It was only the second week since mid-May that gross euro shorts were reduced.
Sterling
The speculative gross short sterling position increased by 5.5k contracts. It is not very much, but it managed to extend the record short position, which now stood at 115.9k contracts as the BOE meeting got underway. It is the fifth consecutive weekly increase in the speculative gross short position. Incidentally, it was also the second week in a row the some bulls are trying to pick a bottom. They added 3.6k contracts in the latest reporting period that ended August 2, to bring the gross long position to 33.4k contracts.
Swiss Franc
Speculators’ position adjustment in the Swiss franc was interesting, and also illustrates the value of looking at gross positions rather than the more traditional exclusive focus on net positions. Speculators reduced exposure to the franc futures. The bull liquidated 5.6k contracts (leaving them with 21.2k), while the bears covered 2.9k contracts (leaving them with 22.9k). The result was a swing in the net position from long a little less than one thousand contracts to being short 1.7k.
U.S. Treasuries
The positive jobs report and the strong increase of hourly weekly wages had a strong influence on U.S. Treasuries. The net long fell by nearly a third.
The bulls had moved into ascendancy in the 10-year Treasury note futures. However, they decided to take a little off the table, while the bears tried to pick a top. The gross long position fell 31k contracts to 575.5k. The gross short position grew by 33.3k contracts. This resulted a reduction of the net long position to 121.2k contracts from 185.5k.
Crude Oil
Summer did not deter the speculators in the oil market. Both bulls and bears think there is a play. The bulls took in another 23.2k contract to raise their holding to 562.5k contracts. The bears still felt the trend was in their favor and sold another 29.3k contracts to bring the gross short position to 295.3k contracts. As a consequence, the gross long position slipped by 6.1k contracts.
| 2-Aug | Commitment of Traders | |||||
| Net | Prior | Gross Long | Change | Gross Short | Change | |
| Euro | -104.1 | -112.6 | 104.5 | -4.7 | 208.6 | -13.2 |
| Yen | 41.7 | 35.0 | 76.6 | 2.5 | 34.9 | -4.2 |
| Sterling | -82.5 | -80.6 | 33.4 | 3.6 | 115.9 | 5.5 |
| Swiss Franc | -1.7 | 0.9 | 21.2 | -5.6 | 22.9 | -2.9 |
| C$ | 17.8 | 23.2 | 41.7 | -2.3 | 24.0 | 3.1 |
| A$ | 31.4 | 31.5 | 58.3 | 1.2 | 26.9 | 1.3 |
| NZ$ | 0.2 | 0.2 | 27.0 | 0.5 | 26.8 | 0.4 |
| Mexican Peso | -52.1 | -46.6 | 23.9 | -0.2 | 76.0 | 5.4 |
| U.S. Treasuries | 121.2 | 185.5 | 575.5 | -31.0 | 454.2 | +33.3 |
| Crude Oil | 569.1 | -6.1 | 562.5 | +23.2 | 295.3 | +29.3 |
| (CFTC, Bloomberg) Speculative positions in 000’s of 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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