Weekly COT Report: Sterling Bears Unloaded Shorts Ahead Of UK Election

As of Tuesday 10^th December:

• Large speculators reduced net-long exposure to USD by -$1.6 billion to $18.2 billion.
• On the DXY, traders are their least bullish since July 2018
• Minor weekly changes to net positioning overall. GBP saw the largest, with short exposure falling -7.4k contracts ahead of the UK election.
• Trader were their most bearish on the Swiss franc in 6-months. Whilst yen traders slightly reduced bearish exposure last week, net-short exposure remains near a 6-month high 

 

 

USD: Whilst still net-long, bullish exposure on the USD has remain subdued and effectively range bound between +10 to +20 billion since July. This is neither a compelling bullish or bearish case, so perhaps we’ll continue to see DXY chop around in ranges until a more divergent theme appears next year between the US and ROW (rest of world).

 

 

GBP: Gross longs reached their highest level since April, ahead of Friday’s UK election which saw net-short exposure at its least bearish level since May. Given the 2% rally at the exit polls, we wouldn’t be too surprised to see traders stitch to net-long in this week’s report (whilst data is released on Friday, the report is compiled on Tuesday)

 

As of Tuesday 10^th December:

• Whilst gold bugs saw a slight reduction in bullish exposure, bears remain side lined and account for just 16.9% of all contracts traded
• Bearish exposure on copper is at its lowest level since May, adding weight to the argument for a bullish breakout
• Traders were their most bullish on platinum since August 2016

 

 

Copper: Gross shorts have been trending lower since August and, whilst early days, we saw a slight pickup with gross longs last week. Last week’s high saw copper futures trade at their highest level since May, although Friday’s bearish engulfing candle warns of near-term weakness and likely mean reversion. Sill, we’ll see if its upswing since September’s low can push higher over the coming weeks.