Specs Cover Short Euro and Yen, but Buy the Aussie

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Speculative activity picked up in the latest CFTC reporting period ending January 24.  There were three gross position adjustments of more than 10k contracts.  

Speculators covered 11.1k previously sold euro futures to reduce the gross short position to 184.3k contracts.  Though it still is large, it reflects a 30% reduction from the peak in late October.  Since then the gross long position has been essential flat.  The fact the euro’s gains in the spot market reflects short-covering from the trend follower and momentum traders reinforces our sense that what is taking place is a correction not a reversal of trend.  

The bears also covered 12.4k yen futures contracts, taking the gross short position to 94k contracts.  A month ago it stood at 140k contracts.  Here too there is not much new buying taking place.  The gross long position slipped by 1.4k contracts, leaving 27.1k.

The bulls showed their hand in the Australian dollar.  They added 12.2k contracts to their gross long position, which now stands at 54.6k contracts.  Some speculators tried picking a top and added 6.7k contracts to the gross short position, lifting it to 44.3k contracts.  The net speculative position was long for the second consecutive week.

Although the gross position adjustments were modest, they were sufficient to swing the net speculative position to long Canadian dollars for the first time since last September.  The bulls added 4.1k contracts to their gross long position.  It is at 36.2k contracts.  The shorts covered 3.9k contracts, leaving a gross short position of 33.7k contracts.  The resulting net long position is 2.5k contracts.

Speculators tried to pick a bottom in the Mexican peso even as the tensions between the US and Mexico escalated. The gross long position increased by 9.6k contracts, the largest gross long rise after the Australian dollar, to 32.1k contracts.  The gross position increased by less than 1k contracts.

The record gross short speculative position in the US 10-year Treasury note futures was extended by another 8.8k contracts to 855.5k.  However, bottom pickers jumped it took 87.4k contracts to add to the gross long position, lifting it to 558.3k contracts.   This resulted in the net position falling from 375.7k contracts to 297.2k.

The bulls continue to charge ahead in the light sweet crude oil futures market.  They added 10.9k contracts to the gross long position, which now stands at 6424k contracts. The bears covered another 7k contracts to trim the gross short position to 160k contacts. The net position rose by 17.8k contracts to 482.5k.

24-Jan        Commitment of Traders
Net  Prior  Gross Long Change Gross Short  Change
Euro -52.3 -66.5 131.9 3.1 184.3 -11.1
Yen -66.8 -77.8 27.1 -1.4 94.0 -12.4
Sterling -63.2 -66.2 51.5 -3.7 114.7 -6.8
Swiss Franc -13.6 -13.7 6.2 -1.0 19.8 -1.0
C$ 2.5 -5.5 36.2 4.1 33.7 -3.9
A$ 10.3 4.8 54.6 12.2 44.3 6.7
NZ$ -9.9 -12.3 25.9 0.3 35.7 -2.1
Mexican Peso -64.7 -73.3 32.1 9.6 96.8 6.9
(CFTC, Bloomberg) Speculative positions in 000’s of contracts