Speculators Extend Record Sterling Shorts in the Futures Market

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For a period that included a BOJ and FOMC meeting and the US GDP, speculators in the currency futures were unusually quiet.  Summer holidays with family may be more important.  

Of the 16 gross currency futures speculative positions we track, 12 of them were less than 5k contracts. There was only one gross position adjustment more than 10k contracts.  Euro bears covered 13.2k gross short euro contracts, leaving them with 208.6k.  It snapped a five week accumulation run, which is part of a larger streak.  It was only the second week since mid-May that gross euro shorts were reduced.  

The speculative gross short sterling position increased by 5.5k contracts.  It is not very much, but it managed to extend the record short position, which now stood at 115.9k contracts as the BOE meeting got underway.  It is the fifth consecutive weekly increase in the speculative gross short position.  Incidentally, it was also the second week in a row the some bulls are trying to pick a bottom.  They added 3.6k contracts in the latest reporting period that ended August 2, to bring the gross long position to 33.4k contracts.

Speculators’ position adjustment in the Swiss franc was interesting, and also illustrates the value of looking at gross positions rather than the more traditional exclusive focus on net positions.  Speculators reduced exposure to the franc futures.  The bull liquidated 5.6k contracts (leaving them with 21.2k), while the bears covered 2.9k contracts (leaving them with 22.9k).  The result was a swing in the net position from long a little less than one thousand contracts to being short 1.7k.

The bulls had moved into ascendency in the 10-year Treasury note futures.  However, they decided to take a little off the table, while the bears tried to pick a top.  The gross long position fell 31k contracts to 575.5k.  The gross short position grew by 33.3k contracts.  This resulted a reduction of the net long position to 121.2k contracts from 185.5k.

Summer did not deter the speculators in the oil market.  Both bulls and bears think there is a play.  The bulls took in another 23.2k contract to raise their holding to 562.5k contracts. The bears still felt the trend was in their favor and sold another 29.3k contracts to bring the gross short position to 295.3k contracts.  As a consequence, the gross long position slipped by 6.1k contracts.

2-Aug      Commitment of Traders
Net  Prior  Gross Long Change Gross Short  Change
Euro -104.1 -112.6 104.5 -4.7 208.6 -13.2
Yen 41.7 35.0 76.6 2.5 34.9 -4.2
Sterling -82.5 -80.6 33.4 3.6 115.9 5.5
Swiss Franc -1.7 0.9 21.2 -5.6 22.9 -2.9
C$ 17.8 23.2 41.7 -2.3 24.0 3.1
A$ 31.4 31.5 58.3 1.2 26.9 1.3
NZ$ 0.2 0.2 27.0 0.5 26.8 0.4
Mexican Peso -52.1 -46.6 23.9 -0.2 76.0 5.4
(CFTC, Bloomberg) Speculative positions in 000’s of contracts