The analysis team at ANZ points out that according to the CFTC leveraged positioning data for the week ending 23 May 2017, leveraged funds were net sellers of USD, unwinding most of the buying seen in the previous two weeks.
Key Quotes
“Overall net long USD positions were reduced by USD3.3bn to USD13.2bn. Post the cut-off date, the FOMC minutes were read as dovish by the market, which likely saw further dollar selling. The upcoming May non-farm payrolls report will be the next key data.”
“Dollar selling was concentrated primarily against the EUR. Funds reduced their overall net EUR short positions by USD3.5bn to USD1.6bn, the lowest since May 2014. This is the fifth consecutive week of EUR buying and if it continues, we could see leveraged funds turning net long EUR for the first time in three years.”
“For six straight weeks now, funds have been net buyers of GBP. Funds reduced their net short GBP positions by USD0.4bn to USD0.1bn. Short positions are now at their lowest levels since mid-June 2016, with leveraged funds on the verge of turning net long in GBP. However, a tightening up in the opinion polls showing the Conservatives’ lead over Labour is falling has weighed on GBP post the CFTC cut-off date, suggesting the six week run of net GBP buying could be coming to an end.”
“JPY and AUD were the only two major currencies that saw net selling versus the USD. The change in JPY positioning was marginal. AUD on the other hand, saw net selling worth USD0.9bn. This is the eighth consecutive week of AUD selling, resulting in leveraged funds holding net short positions for the first time since January this year.”
“Meanwhile, funds reduced their net NZD short positions by USD0.2bn to USD0.5bn, while keeping net CAD positioning largely unchanged.”
“EM currency positioning was reduced in the week. MXN and RUB longs were reduced by USD0.4bn and USD0.1bn respectively. Surprisingly, BRL saw modest net buying despite the emergence of a political scandal involving the Brazilian president.”
“Funds added 148.4k contracts to take their net long 10-year UST position to record highs. Meanwhile, net long crude oil and gold positions picked up after four consecutive weeks of net selling, in line with rising commodity prices during the week.”
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