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USD shorts increased, EUR long positions lost some ground - Rabobank

According to the IMM net speculators’ positioning as at November 28, 2017, USD shorts increased to their highest level of the year last week. 

Key Quotes

“Given that the Senate has subsequently passed its tax reform bill, it is possible that the some of the negative sentiment will reverse in the next set of data.”

After the previous week’s jump higher EUR long positions have lost some ground, though they remain essentially consolidative.   The strength of the Eurozone economic recovery and the region’s large current account surplus continue to be supportive factors for the EUR.”

Net GBP positions pushed back into positive territory on hopes that the UK is prepared to increase the size of its divorce bill offering. Although there are no signals that the issue of the Northern Ireland border has yet been sorted out, the market is optimistic that UK/EU trade talks will soon commence.”

Net JPY shorts have fallen for a second consecutive week, though they still remain elevated. A rise in geopolitical risk may have impacted positions last week. That said, 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 seventeen consecutive week and the size of these positions has grown significantly since mid-October. 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, and concerns about German politics have eased.”

CAD longs have stabilised at levels significantly lower than those held in October 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 also stabilised at levels about half the size of their September high. 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.”

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