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Two significant adjustment to gross positioning in the future market - BBH

FXStreet (Bali) - Marc Chandler, Global Head of Currency Strategy at BBH, reviews the latest changes on the speculative positioning in the futures market, noting there were two significant adjustment to gross positioning in the future market.

Key Quotes

"There were two significant (more than 10k contract) adjustment to gross positioning in the future market. First, the gross short yen position grew 17k contracts to 158k. This reflects a rapid accumulation. The gross short position has doubled since mid-July and is up 2/3 since mid-August. Second, the gross short Canadian dollar position jumped by more 13k contracts, or more than 50%, to 37.6k contracts. This is the largest gross short position since the end of July."

"The gross position adjustment were sufficient to switch the net speculative positioning in the Australian and Canadian dollars and the Mexican peso to the short side. In the Australian dollar and peso's case it the switch was a function of both longs being cut and short growing. The Canadian dollar saw an increase in both longs and shorts. On the other hand, sterling swung to a small net long position. This was more a result of shorts being covered (-4.1k contracts to 50.7k), than longs growing (0.6k contracts to 54.2k)."

"The clear bias was for gross short foreign currency positions to grow. Sterling was the sole exception. The rise of the gross short positions reflects the bullish dollar trend and momentum. At the same time, gross long positions mostly increased. Here Australian dollar and Mexican peso were the exceptions. The increase in gross long positions seems to indicate some bottom picking attempts."

"The net speculative position in the 10-year US Treasury futures swung back to the short side by 12.5k contracts from being long 8.8k in the prior period. This was a function of gross longs being trimmed by 10.2k contracts (to 449.9k) and new 11.2k new short contracts (which lifts the gross position to 462.4k)."

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