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8 Feb 2016
EUR shorts slashed prior to EUR/USD break higher – RBS
Brian Daingerfield, FX Trading Strategist at RBS, lists down the latest CFTC positioning data covering through the week ended Tuesday, February 2nd, meaning the positioning data reflect non-commercial positions (futures only) prior to the sharp sell-off in the DXY which started Wednesday.
Key Quotes
“The GBP positioning data do not cover the MPC’s February Inflation Report.
• The collapse in EUR net shorts stands out in today’s report simply because the report covers the week ended February 2nd, when EUR/USD closed just above 1.09 before quickly testing as high as 1.1250 just two days later. EUR shorts were pared back impressively, falling to just 87K contracts net short from 127K contracts net short in the prior week. The net short EUR position among non-commercial accounts is the smallest net short since October 20th, prior to the October ECB decision.
• The surprise expansion of new easing by the BoJ led to a pull-back in JPY longs, marking the first time in 6 weeks that non-commercial accounts did not reduce their net short or add to their net long in JPY.
• In last week’s report, we noted the lack of clear positioning clearing in CAD despite a sharp sell-off in USD/CAD after the Bank of Canada left rates unchanged and oil prices rebounded. This week’s data do show a clear reduction in net shorts – net shorts in CAD fell from 67K in the previous week (largest net short since August) to just a 52K net short, the smallest of the year.
• Net GBP shorts were pared modestly by speculative accounts. The net-short GBP position of 45K contracts is just slightly smaller than the 48K net short seen as of January 26th, which was the largest net short in GBP dating back to 2013.
• Our estimate of long USD positioning vs. the G10 slipped from $23.9bn to $18.2bn, a new low since October 2015. Overall, speculative accounts have been long USD vs. the G10 since May 2014.”
Key Quotes
“The GBP positioning data do not cover the MPC’s February Inflation Report.
• The collapse in EUR net shorts stands out in today’s report simply because the report covers the week ended February 2nd, when EUR/USD closed just above 1.09 before quickly testing as high as 1.1250 just two days later. EUR shorts were pared back impressively, falling to just 87K contracts net short from 127K contracts net short in the prior week. The net short EUR position among non-commercial accounts is the smallest net short since October 20th, prior to the October ECB decision.
• The surprise expansion of new easing by the BoJ led to a pull-back in JPY longs, marking the first time in 6 weeks that non-commercial accounts did not reduce their net short or add to their net long in JPY.
• In last week’s report, we noted the lack of clear positioning clearing in CAD despite a sharp sell-off in USD/CAD after the Bank of Canada left rates unchanged and oil prices rebounded. This week’s data do show a clear reduction in net shorts – net shorts in CAD fell from 67K in the previous week (largest net short since August) to just a 52K net short, the smallest of the year.
• Net GBP shorts were pared modestly by speculative accounts. The net-short GBP position of 45K contracts is just slightly smaller than the 48K net short seen as of January 26th, which was the largest net short in GBP dating back to 2013.
• Our estimate of long USD positioning vs. the G10 slipped from $23.9bn to $18.2bn, a new low since October 2015. Overall, speculative accounts have been long USD vs. the G10 since May 2014.”