AUD Net Short Stretches to New Record Levels

• Friday’s CoT CFTC report showed the AUD net position falling sharply in the latest week – dropping to an alltime low of 48.7% of open interest. The outright position of a net short of 107,538 contracts is also the lowest in recorded history on CFTC data going back to 1993.
• Other comparable periods for when the markets were this net short the AUD: Aug’21 (47% of OI), Sep’18, Dec’13 and Dec’97.
• Positioning shifts coincide with the fade off the March recovery high for AUD and the dropping of the tightening bias at the RBA. Further concerns over the fate of the Chinese economy despite the frequent policy tweaks by the Chinese authorities.
• MXN positioning was the most notable winner of the past week, as markets built the net long position closer to 52w highs. Markets added 24,378 contracts to push the net long to 42.4% of open interest – making the trailing 52-week Z-score the highest among the currencies surveyed at 1.67.
• Other notable positioning swings on the week included a small build for the GBP net long, while markets trimmed the EUR net long, and built the net shorts in NZD, CAD and CHF.

Figure 1: AUD Net Short as % of Open Interest Stretches to New Lows