USD short positions increased, EUR longs surged - Rabobank

According to the IMM net speculators’ positioning as at September 26, 2017, speculators’ net short USD positions increased to their highest level since April 2014 despite the hawkish signals from the Fed, notes the analysis team at Rabobank.

Key Quotes

“The market remains unconvinced about the ability of the GOP to push through tax reform this year.”

“For the first time since November 2015, net GBP positions have clawed their way back into positive ground. Hawkish talk from the BoE appears to be have the desired effect in lifting the pound. However, political uncertainty and signs of slowing growth in the UK continue to cloud the outlook.”

“In spite of the result of the German election a week ago which weakened Chancellor Merkel’s grip, net EUR longs increased indicating that the bout of profit-taking the previous week was not the start of a new trend. That said, EUR longs remain below their early September high.”

“Net JPY short positions climbed further last week suggesting that the market’s desire to hold JPY for safe haven reasons is dwindling. Strong levels of world growth are attracting funds into higher yielding destinations. That said, shorts are still well below the recent highs seen in July.”

“CHF positions remained in negative territory for an eighth consecutive week. The modest increase in short positions last week appears consistent with the increase in EUR longs last week.”

“CAD longs rose again, though a lack of hawkishness in comments from BoC Governor Poloz later in the week is likely to lead to a reduction of longs in the next set of data. AUD longs increased further. Chinese economic data and prices of iron ore and coal remain in focus.”