EUR longs fell back heavily, USD positions stays in positive territory - Rabobank

According to the IMM net speculators’ positioning as at May 29, 2018, speculators’ USD positions have been in positive territory for three consecutive weeks and have reached their highest levels since last July.

Key Quotes

“The USD has taken a breather in the spot market, this may be reflected in the next release of speculators’ positions.”

“EUR longs fell back heavily, this being the sixth consecutive fall. The surge of concern about the Italian political situation explains the pressure on the EUR last week, a more sanguine tone could be reflected in the next set of data.”

“GBP net longs rose moderately last week, though they remain well below their April levels. The drop in net longs last month mostly reflects the fall in expectations regarding BoE rate hikes this year. UK political uncertainty is also a risk factor for the pound.”

“Net JPY positions drilled deeper into negative territory despite the panic in the Italian bond market in the early part of last week. A calming in market sentiment is evident in the spot market this week despite fears of trade wars and a reawakening of fiscal concerns in the Eurozone.”

“CHF net shorts increased for a fourth consecutive week. Reports of an unwinding of large Russian positions may have created additional pressure on the CHF this spring. Political tensions in Italy failed to lend the safe haven CHF support last week.”

“CAD shorts halved last week. Focus has been on BoC policy although oil prices, Nafta and trade wars also remain in view. AUD shorts extended moderately slightly and are now at their most negative since early 2016.”