The analysis team at Rabobank points out that according to the IMM net speculators’ positioning data of 16 May, bullish bets on the EUR have leapt even further after having surged into positive territory for the first time since May 2014 the previous week
Key Quotes
“On the back of the news that Le Pen had been defeated in the second round of the French Presidential election, EUR positions are now at their strongest level since March 2014. Better economic data in the Eurozone and the debate about the possibility of a potential change to the ECB’s forward guidance have also contributed to the EUR’s better tone.”
“Aided by improved risk appetite in Europe, JPY shorts increased for a third consecutive week last week. This is despite the rise in political uncertainty in the US. Further testing of nuclear missiles by N. Korea could also offer support to the JPY going forward.”
“USD longs dropped even further last week to their lowest levels since last Oct – ahead of the Trump win in the Presidential election. The fall in long positions reflect domestic political upheaval and is despite strong expectations for a June rate hike from the Federal Reserve.”
“Bearish bets against the pound dropped again last week and are now just a third of the size registered at the end of April. The better tone could be offset by news that PM May’s large advantage in opinion polls has been reduced as the June 8 general election nears. Although a lot of bad news regarding the Brexit process has been priced into GBP, the pound could be vulnerable again once negotiations regarding trade between the UK and the EU27 are underway.”
“CHF shorts increased again last week as risk appetite improved following the Macron victory in the French Presidential election.”
“CAD shorts surged again last week, extending for an eleventh week the drop in confidence in the unit. That said, the recovery in the price of oil should bring some support in the next set of data. AUD long positions dropped sharply last week. The better tone in iron ore prices should lend support this week.”
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