USD longs added, EUR shorts increased - ANZ

Irene Cheung, Senior Strategist at ANZ, lists down the CFTC positioning data for the week ending 19 July 2016.

Key Quotes

“Leveraged funds added USD3.9bn to bring their net long USD positions to USD11.6bn for the week ending 19 July, the highest since March 2016. USD saw broad-based buying (except against the CAD and AUD) on improving US data, which could have extended after the cut-off date.

For the week, funds added USD1.8bn to their net short EUR positions, taking the overall to USD15.4bn, the highest since January 2016. Meanwhile, funds further increased their net GBP shorts by USD1.4bn to USD4.5bn. This position is likely to intensify as weak economic activity, including contraction in PMIs, have prompted calls for BoE easing in August.

After three consecutive weeks of buying, leveraged funds reduced their net long JPY positions by USD1.1bn to USD5.1bn. Price action post the cut-off date suggests this pare-back continues as the BoJ is expected to announce more stimulus at its upcoming monetary policy meeting.

Commodity currencies were a mixed bag this week. Leveraged funds raised their net CAD and AUD longs by USD0.1bn and USD0.7bn respectively. However, they reduced their net long NZD positions by USD0.2bn to USD1.8bn on increased expectations of a rate cut by the RBNZ following lower than expected inflation and LVR limit proposals.

Among the EM currencies, leveraged funds increased their net longs in the RUB by USD0.11bn and BRL by USD0.01bn, while raising their MXN shorts by 0.03bn. Overall net RUB longs reached USD0.6bn this week, the highest so far this year.

Reflecting risk-on sentiment, leveraged accounts reduced their net longs in gold for a second consecutive week to 318,788 contracts. They also trimmed their net longs in 10Y UST to 84,243 contracts.”