This data references the period ending Tuesday, November 1st.
Non-Commercials increased their net short positions in the Euro last week selling a further 14k contracts to take the total position to -137k contracts. Selling pressure has intensified in the Euro over the last month as traders continue to expect the ECB to announce an extension t QE at their upcoming December meeting. The Euro was extremely volatile last week in response to the US election outcome where initial gains were quickly reversed. The Euro fell to its lowest level since October 25th as risk markets rebounded in response to the election result, seeing both equities and the US Dollar trading back up to pre-result highs.
Markets seem to be responding positively to an apparent moderation of Trump’s attitude which as seen a notable absence of his usual controversial remarks. Traders this week will be paying close attention to both EuroZone and US CPI figure. With risk sentiment has responded robustly to the election, a solid US CPI number will be a strong signal for markets that a December hike is still on the table.
Non-Commercials continued to reduce their net short positions in Sterling last week buying 1k contracts to take the total position to -83k contracts. Sterling shorts have been consistently squared over the last month as a lack of catalysts for fresh downside has seen non-commercials pulling back from extreme levels.
Markets remain optimistic about the chances of avoiding a hard Brexit in the light of a parliamentary vote being required for the official triggering of Article 50. GBP was the top performer against the US Dollar last week responding positively to reports that Trump has said Britain will be at the front of the queue for a trade deal. Data wise this week traders will be watching earnings and employment data looking for continued positive momentum there which should provide a further boost for the currency.
Non-Commercials reduced their net long positions in the Japanese Yen last week selling 1k contracts to take the total position to 43k contracts. Continued volatility in JPY positioning reflects the uncertainty of the market over recent weeks as risk sentiment fluctuated in response to developments with the US elections. With markets having recovered robustly in the wake of the initial post-election sell-off, JPY has been weaker on diminished on weaker safe-haven demand. The BOJ commented ahead of the election result that they stood ready to act if needs be to counter any JPY strength, though for now, this comment is no longer valid. On the data front, 3q GDP came in much stronger for Japan at 2.2% vs. 0.8% expected.
Non-Commercials increased their net short positions in the Swiss Franc last week selling 1k contracts to take the total position to -20k contracts. Selling pressure has intensified in the Swiss Franc over recent weeks as easing expectations grew on CHF safe haven demand. The Swiss Franc has since declined significantly as risk sentiment rebounded in the wake of the election result, causing a heavy reduction in safe haven buying.
Non-Commercials increased their net long positions in the Australian Dollar last week buying a further 9k contracts to take the total position to long 41k contracts. The Aussie continues to see firm demand as investor dial back easing expectations in response to the RBA’ recent rates meeting which saw the bank keeping rates on hold whilst also noting that they are comfortable with the current AUD level. Traders will this week be watching the release of the meeting minutes for any further clarity on the expected rate path. We also have the release of Australian Unemployment data on Thursday.
Non-Commercials increased their net short positions in the Canadian Dollar last week selling a further 3k contracts to take the total position to -16k contracts. The Canadian Dollar has come under continued selling pressure over recent weeks as Oil prices have waned on increased skepticism regarding the likely implementation of the proposed OPEC deal. US rate hike expectations have also added pressure to the currency as markets continue to expect that the Bank of Canada will soon ease again. Traders this week will be watching Canadian CPI on Friday.