10 Feb 2014
Flash: Observations from the speculative positioning in the CME currency futures - BBH
FXStreet (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman has made the following observations surrounding Friday’s COT report.
Key Quotes
“1. The net speculative position in the euro has chopped back and forth and for the reporting period ending Feb 4 swung back to the short side. This likely misrepresents the current positioning as it does not capture the euro's rally in the second half of the last week. On the other hand, the net Swiss franc position shifted back long.”
“2. There were three substantial (more than 10k contract) gross position adjustments during the reporting period. Long euros and long sterling positions were slashed (19.3k and 11.3k contracts respectively). The gross short Australian dollar position was reduced by 12.5k contracts.”
“3. The overhang of long gross euro positions has been pared, arguable leaving it in a better position to move higher. After peaking in late October near 137k contracts, the gross long position of 67.6k contracts is smallest since July.“
“4. The net short yen position of 76.8k contracts, is the smallest since the first half of November. It has been largely driven by short covering. The 9.4k reduction in short yen positions in the most recent reporting period just missed our 10k threshold and brings the gross position to 92.7k contracts. It peaked three months ago near 158k contracts.”
“5. The net long sterling position was halved to 11k in the most recent reporting period. It is the smallest since the end of November. The 11.3k contract decline in gross long positions was the largest since July. The 52.1k gross long contracts compares with a peak in early December near 74k contracts.”
Key Quotes
“1. The net speculative position in the euro has chopped back and forth and for the reporting period ending Feb 4 swung back to the short side. This likely misrepresents the current positioning as it does not capture the euro's rally in the second half of the last week. On the other hand, the net Swiss franc position shifted back long.”
“2. There were three substantial (more than 10k contract) gross position adjustments during the reporting period. Long euros and long sterling positions were slashed (19.3k and 11.3k contracts respectively). The gross short Australian dollar position was reduced by 12.5k contracts.”
“3. The overhang of long gross euro positions has been pared, arguable leaving it in a better position to move higher. After peaking in late October near 137k contracts, the gross long position of 67.6k contracts is smallest since July.“
“4. The net short yen position of 76.8k contracts, is the smallest since the first half of November. It has been largely driven by short covering. The 9.4k reduction in short yen positions in the most recent reporting period just missed our 10k threshold and brings the gross position to 92.7k contracts. It peaked three months ago near 158k contracts.”
“5. The net long sterling position was halved to 11k in the most recent reporting period. It is the smallest since the end of November. The 11.3k contract decline in gross long positions was the largest since July. The 52.1k gross long contracts compares with a peak in early December near 74k contracts.”