by Marc Chandler
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Comment on Swiss Franc by George Dorgan
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Swiss Franc
Last week SNB Q3 window cleaning that led to a big CHF net short position. This week this changed again. Both longs and shorts on CHF increased, but the net short position fell.
During the CFTC’s Commitment of Traders week ending October 4, speculators took on risk. Of the sixteen gross currency positions we track, speculators added to their exposure in all but five. Bulls and bears saw opportunity.
The bears were decisive. Of the significant position adjustments (a change in gross position by at least 10k contracts), two were adding to gross shorts (euro and sterling). The New Zealand dollar and Mexican peso were the only two where the bears did not add to gross short position.
The bulls did not extend gross long positions in three of the eight currencies: the Canadian and New Zealand dollars and the Mexican peso. What the disaggregated view reveals is that the New Zealand dollar and Mexican peso were the exceptions to the general pattern. Speculators moved to the sidelines in both currencies. That leaves the 2k contract liquidation of gross long Canadian dollar position to be the sole exception of speculators adding to positions.
Euro
The gross short euro position expanded by 11.2k contracts to 187.7k. It is the largest in a month. The gross sterling position jumped 18.4k contract to 154.3k, a new record. It has risen by 31k over the past three reporting periods. A week after the June referendum, the gross short position stood at 94.8k contracts.
Australian Dollar
The bulls made only one significant adjustment to their currency futures position. It was the Australian dollar. They added 10.7k contracts to lift the gross long position to 73.5k contracts. The gross short position hardly changed, rising 1.7k contracts to 46.9k. The result was an increase in the net long speculative Aussie position too 23.9k contracts from 15.0k. Two weeks ago, the net speculative position was long by 6.8k contracts.
U.S. Treasuries
Speculators cut exposure in US 10-year Treasury futures. The bulls liquidated 29.4k contracts, leaving a gross long position of 688.9k contracts. The bears covered 16.2k contracts, reducing the gross short position to 561.8k contracts. The results of these gross position adjustments was a reduction in the net long position to 127.2k from 140.4k contracts.
Crude Oil
Speculators turned more bullish light sweet crude oil. The net long speculative position increased by 71.3k contracts to 363k, a five-month high. The gross long position grew 27.5k contracts to 571.3k. The gross short position fell 43.8k to 208.3k contracts.
| 4-Oct | Commitment of Traders | |||||
| Net | Prior | Gross Long | Change | Gross Short | Change | |
| Euro | -82.1 | -76.0 | 105.6 | 5.1 | 187.7 | 11.2 |
| Yen | 68.7 | 68.8 | 102.0 | 4.6 | 33.3 | 4.8 |
| Sterling | -97.6 | -87.7 | 56.8 | 8.6 | 154.3 | 18.4 |
| Swiss Franc | -2.9 | -6.0 | 19.3 | 6.5 | 22.2 | 3.5 |
| C$ | -14.1 | -11.6 | 32.6 | -2.0 | 46.7 | 0.5 |
| A$ | 23.9 | 15.0 | 73.5 | 10.7 | 49.6 | 1.7 |
| NZ$ | -7.8 | -6.8 | 32.2 | -1.9 | 40.1 | -9.0 |
| Mexican Peso | -85.9 | -85.9 | 22.4 | -2.5 | 108.3 | -2.5 |
| (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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