This week’s Scotiabank FX Sentiment Report came on Friday the 12th which covered the market developments until the 9th of June.
The bank covered EURO, JPY, USD and CAD in this week’s report.
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Bearish EUR sentiment continues to moderate
As the short covering continues, providing for the bulk of this week’s $3.6bn narrowing in the net short bearish Euro sentiment continues to moderate according to the bank.
Scotiabank Aggregate USD Position & EURO Net Position
EURO - Non-commercial positioning
| Date | ($MM) Net | Position – contracts of 125,00 EUR | ||||
| Long | Short | Net | Net w/w | Open Int. | ||
| 9 June | -19,460 | 52,643 | 190,617 | -137,974 | 27,538 | 436,540 |
| 2 June | -23,070 | 49,471 | 214,983 | -165,512 | 6,228 | 428,403 |
| 26 May | -23,342 | 44,221 | 215,961 | -171,740 | -3,401 | 431,927 |
| 19 May | -23,462 | 38,758 | 207,097 | -168,339 | 10,637 | 428,580 |
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Aggressive JPY bears continued
JPY sellers aggressively continued to add to their short positions, with this week’s $2.6bn build the largest of the past 4 consecutive weeks providing for an aggregate deterioration of $9.5bn. The bank continued that “the rapid build would have left newly established positions especially vulnerable to a turn, amplifying the impact of BoJ Gov. Kuroda’s FX comments.”
| Date | ($MM) Net | Position – contracts of 12.5 MM JPY | ||||
| Long | Short | Net | Net w/w | Open Int. | ||
| 9 June | -11,690 | 42,440 | 158,726 | -116,286 | -30,593 | 306,449 |
| 2 June | -8,631 | 46,681 | 132,374 | -85,693 | -23,469 | 260,104 |
| 26 May | -6,318 | 50,210 | 112,434 | -62,224 | -40,219 | 251,744 |
| 19 May | -2,279 | 63,398 | 85,403 | -22,005 | 1,588 | 231,658 |
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Major bearish sentiment outlook
The bank maintains bearish sentiment towards most of the major currency pairs. Few tradable instruments are exceptions for the bank’s bearish sentiment. These are the Swiss frank, the US dollar and Gold.
| Bearish | Bearish | |||
| 9 June | Bias | Trend | Position | w/w chg. |
| CAD | Bearish | Increasing | -1,114 | -1,031 |
| AUD | Bearish | Neutral | -1,079 | -49 |
| NZD | Bearish | Neutral | -841 | -84 |
| MXN | Bearish | Neutral | -1,641 | -179 |
| EUR | Bearish | Decreasing | -19,460 | 3,611 |
| GBP | Bearish | Increasing | -2,719 | -259 |
| CHF | Bullish | Neutral | 1,360 | 240 |
| JPY | Bearish | Increasing | -11,690 | +3,060 |
| Gold | Bullish | Decreasing | 8,837 | -3,620 |
Total USD position (excluding gold) |
37,184 | 810 | ||