J.P.Morgan: Medium-Term USD Positioning Near Neutral

When it comes to broader FX positioning J.P.Morgan write “USD call demand outpaced puts across most liquid crosses in January, but longer-term positioning is still fairly neutral. In futures, USD has cut half of the net shorts from early January.”

• “JPY and CHF call option demand emerged over the last two weeks, just as broadly-dovish central bank meetings and rates compression re-emerged as key macro themes.”
• “There are contrasting signals in the futures and options data for AUD, and to a lesser extent JPY. On AUD, transactions in call options continue to far outpace puts, and have for some time. This includes on crosses (AUD/NZD positioning screens elevated in options). But AUD remains clearly short in futures.”
• “As already highlighted, JPY call demand re-emerged, but positioning further deteriorated in the latest futures data.”
• “In futures, GBP remains long and is nearing stretched levels.”
• “Investors have cut CAD shorts aggressively since November, to neutral overall levels.”