Speculators Swing Back To Net Long Aussie

| About: CurrencyShares Euro (FXE)
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Summary

Speculators mostly cut exposure to the European currency futures.

They mostly added to the gross long dollar bloc currency positions.

Light profit taking and bottom picking evident among speculators in the 10-year note futures, before the large sell-off in the second half of last week.

The CFTC reporting week ending January 17 was shortened by the Martin Luther King holiday. Speculators in the currency futures market made only small position adjustments. No adjustment met our bar for significance at 10k contracts.

There was only one gross position adjustment of more than 6k contracts. The Australian dollar bears covered 7.1k contracts to reduce the gross short position to 37.6k contracts. This was sufficient to swing the net position back to favor longs (4.8k contracts) for the first time in four weeks. The bulls only added 1.6k contracts.

Speculators reduced exposure to the major European currencies by liquidating longs and covering shorts. In the euro, this has been a bit of a trend. The gross longs and shorts peaked in late October near 143k and 267k contracts, respectively. They now are at 128.8k and 195.3k contracts. The shorts have been reduced by a little more than 14k contracts, while almost 72k short contracts were covered.

On the other hand, speculators took on more yen exposure. The bulls added 2.5k contracts to bring the gross long position to 28.6k contracts. The bears added roughly five hundred contracts to the gross short position, which stands a 106.4k contracts. In the past month, about 36k gross short contracts have been bought back.

Speculators were mostly bullish the dollar-bloc currency futures and added to gross long positions. Except for the Australian dollar as we have seen, speculators added to gross short positions, but not as much as growing the longs. This results in smaller net short positions, but the Australian dollar is the only currency futures we track where speculators are net long.

After reducing longs and amassing a record short position in recent weeks, speculators in the 10-year Treasury note futures reversed themselves. Bottom pickers added 15.8k contacts to their gross long position. It now stands at 471k contracts. The shorts took profits on 3.1k contracts, leaving the gross short position at 846.7k contracts. Note that in the three sessions that followed the end of the reporting period the 10-year cash yield rose nearly 20 bps.

Speculators in the light sweet crude oil futures extended the net and gross long position. They added 27.3k contracts to their gross long position, which is now 631.5k contracts. The bears covered 3.8k contracts previously sold to leave them with 166.9k contracts.

17-Jan

Commitment of Traders

Net

Prior

Gross Long

Change

Gross Short

Change

Euro

-66.5

-65.8

128.8

-5.9

195.3

-5.2

Yen

-77.8

-79.8

28.6

2.5

106.4

0.5

Sterling

-66.2

-65.8

55.2

-1.5

121.5

-1.1

Swiss Franc

-13.7

-14.2

7.2

-2.8

20.8

-3.4

C$

-5.5

-7.9

32.1

3.7

37.5

1.2

A$

4.8

-3.8

42.4

1.6

37.6

-7.1

NZ$

-12.3

-14.0

25.5

2.5

37.8

0.9

Mexican Peso

-73.3

-71.8

22.6

-1.3

95.9

0.2

(CFTC, Bloomberg) Speculative positions in 000's of contracts

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.