Scotiabank weekly COT report

14 December,, London – With the long anticipated FOMC meeting on Wednesday, Scotiabank has shared the key takeaways from the weekly COT report, covering currency investors’ FX positioning for the previous week ahead of the Fed.

Weekly COT report

Sentiment $mns
11-Dec Bias Trend Position w/w chg.
EUR Bearish Decreasing -23463 840
JPY Bearish Decreasing -6920 700
CHF Bearish Neutral -3217 -197
CAD Bearish Neutral -2955 -36
AUD Bearish Decreasing -2423 993
GBP Bearish Decreasing -2242 422
MNX Bearish Neutral -716 54
NZD Bullish Increasing 590 273
Gold Bullish Increasing 2109 1067
Total USD posn. (ex. Gold) 41345 -3049

Source: Scotiabank

Analysis and commentary

“CFTC data for the week through Tuesday December 8th reflect a modest reduction in aggregate long USD bets among speculative and levered trading accounts,” Scotiabank begins. Yet, considering the 3 percent rise in the EUR after the ECB meeting on 3rd of December, the overall shift in currency market positioning is rather subdued.

Net USD long positioning was cut by around $3bn this week. Changes in EUR only represented less than a third of the change in the Dollar.

In particular, net EUR short positions we reduced by 10k contracts, or USD840 mn. Of course, the positions could have been re‐initiated as the EUR steadied, “but that suggests investors are either loathe the ditch the short EUR trade or happy to sell into EUR gains for now,” Scotiabank added.

See: Bank of America 2016 technical trend trade

Elsewhere, data indicated significant short covering in the AUD, with trimmed USD993 mn in net short positioning during the week. In the JPY, on the other hand, net shorts reduced by USD700 mn, which is a lot less for more liquid Yen.

“Despite the CAD being one of the worst‐performing major currencies in the week through Dec 8th, investors appear to have been slow to react; net CAD shorts rose a modest 1.1k contracts net,” Scotiabank finished.

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