USD positions turned negative, EUR longs drifted lower - Rabobank

According to IMM net speculators’ positioning as at November 14, 2017, the USD’s flurry back into positive ground proved to be short-lived with net positions turning negative again last week, points out the research team at Rabobank. 

Key Quotes

“Although Congress passed their tax bill, the progress of the Senate version is expected to be far trickier.”

“Net EUR longs drifted a little lower, though they remain at elevated levels.   The strength of the Eurozone economic recovery continues to be a supportive factor for the EUR. That said, the failure of German coalition talks could weigh on sentiment going forward.”

“Net GBP shorts halved. The previous week sentiment soured on the back of the BoE’s ‘dovish-hike’. Going forward Brexit talks remain a prime influence. Some respite may be offered to GBP if the EU agree to start trade talks in December.”

“Net JPY shorts have increased for a fourth consecutive week to their highest level since December 2013. A decline in geopolitical risk, strengthening risk appetite on the back of strong world growth and accommodative policy conditions at the BoJ have supported the use of the JPY as a funding currency.”

“CHF positions have been in negative territory for fifteen consecutive week and the size of these positions has grown significantly over the past four weeks. This is consistent with higher levels of risk appetite and a backdrop of solid growth in the Eurozone. The worries around Catalonia have not triggered contagion, though German politics may increase risk aversion in the region which could support the CHF.”

“CAD longs have slipped for a fifth consecutive week as the market looks ahead to a period of steady policy from the BoC. Oil prices have failed to offer much influence recently. AUD longs have fallen back for a seventh consecutive week. The RBA has indicated there is little chance of a near-term policy hike. Chinese economic data and prices of iron ore and coal remain in focus.”