Leveraged funds switch to being net long EUR and net short AUD – Nomura

Analysts at Nomura note that in the week ended 2 January, leveraged funds’ positioning switched to being net long EUR (+16% of outstanding contracts), the largest net long position since September 2017.

Key Quotes

“Asset managers remained net long EUR, with the current level (38%) broadly in line with the six month average.”

“AUD, NZD & CAD: Leveraged funds moved to being net short AUD (-7%) for the first time since mid-June 2017 and increased their net short NZD positioning (to -62%), a high since Q1 2009, and are now neutral CAD, after being as high as +71% net long in October. By contrast, asset managers reduced long-standing net short AUD (-51%) and NZD (-7%) positioning, and added to net long CAD positions (+63%).”

“GBP: Leveraged funds reduced GBP net longs for a second week, from 23% to 18%. Conversely, asset managers remain net short GBP, although current levels (-40%) are tracking below the 2017 average (-63%).”

“JPY: Leveraged funds’ net short JPY positioning rose from -42% to -46%, retracing the previous week’s move. Asset managers trimmed net JPY shorts to -14% of outstanding contracts (from -22%), and are now at the lowest level since mid-November 2016.”

“USD: Our BIS volume-weighted proxy shows that leveraged funds’ net long USD positions moderated to 6%, while asset managers are close to neutral (+1%).”