MNI BRIEF: US Budget Deficit $367B In Nov; FYTD Record $624B

MNI BRIEF: Former BOC Dep Beaudry Sees 2.75%-3% Rate In 2025

BOC WILL BE CONSDIERING FURTHER RATE CUTS

MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: US NOV TREASURY BUDGET -$366.8B

EZ/UK Bond Supply Calendar: BTP Auction on Thursday

US EIA: CRUDE OIL STOCKS EX SPR -1.42M TO 422.0M DEC 06 WK

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

FOREX: Positioning Swings Sharply Towards USD, Close To Earlier 2024 Extremes

FOREX
BulletMarketsFixed Income BulletsForeign Exchange Bullets

The IMM CFTC positioning update from Friday (up to the 15th of Oct, last Tuesday) showed a sharp shift back in favor of the USD. The table below outlines the shift in weekly positions by currency, by leveraged contracts and for asset managers. For leveraged managers, only yen long positions were added to last week. All other segments saw net selling, particularly in terms of AUD. For the asset management segment, we only saw CHF shorts trimmed slightly. 

  • Asset managers returned to shorts in AUD, while leveraged names nearly halved their longs. Asset managers were also particularly aggressive in position adjustments for EUR (cutting longs) and CAD (adding to shorts).
  • The second chart below plots the aggregate weekly change in USD positioning across asset managers and leveraged contracts (net negative results means adding to USD positions and vice versa for positive outcomes.
  • We haven't seen such a sharp swing in favor of the USD since the middle of this year.
  • Interestingly the prior two occasions we saw such a position adjustment the USD BBDXY index faltered around the same time or not long after. The caveats this time around are that the BBDXY level is lower, while the US election is also closer. Macro shifts in terms of US data surprises and growth expectations (which has impacted the Fed outlook) have also been in play. Still, given the size of the position adjustment per CFTC some of this is arguably now discounted by the market. 

Table 1: CFTC Positioning By Currency/By Type 

Keep reading...Show less
282 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The IMM CFTC positioning update from Friday (up to the 15th of Oct, last Tuesday) showed a sharp shift back in favor of the USD. The table below outlines the shift in weekly positions by currency, by leveraged contracts and for asset managers. For leveraged managers, only yen long positions were added to last week. All other segments saw net selling, particularly in terms of AUD. For the asset management segment, we only saw CHF shorts trimmed slightly. 

  • Asset managers returned to shorts in AUD, while leveraged names nearly halved their longs. Asset managers were also particularly aggressive in position adjustments for EUR (cutting longs) and CAD (adding to shorts).
  • The second chart below plots the aggregate weekly change in USD positioning across asset managers and leveraged contracts (net negative results means adding to USD positions and vice versa for positive outcomes.
  • We haven't seen such a sharp swing in favor of the USD since the middle of this year.
  • Interestingly the prior two occasions we saw such a position adjustment the USD BBDXY index faltered around the same time or not long after. The caveats this time around are that the BBDXY level is lower, while the US election is also closer. Macro shifts in terms of US data surprises and growth expectations (which has impacted the Fed outlook) have also been in play. Still, given the size of the position adjustment per CFTC some of this is arguably now discounted by the market. 

Table 1: CFTC Positioning By Currency/By Type 

Keep reading...Show less