COT Report – Analysis and Talking Points
- Japanese Yen Flips to Net Short
- GBP/USD Net Shorts Unchanged Despite 5% Surge
- US Dollar Bullish Positions Largest in Four Months
The Predictive Power of the COT Report
Source: CFTC, DailyFX (Covers up to October 15th, released October 18th)
GBP/USD Shorts Unchanged Despite Rally, Japanese Yen Flips to Short – COT Report
The latest CFTC positioning data showed that speculators extended their USDnet long positions by $2.1bln vs G10 currencies with most of the increase due to the deterioration in Japanese Yen sentiment. Consequently, overall US Dollar bullish bets are at the highest since late June.
The largest positional change ($2.05bln) had been observed in the Japanese Yen, which saw speculators flip back to net short as demand for safe havens eased following the reduced risks associated to US-China trade war tensions, alongside no-deal Brexit concerns.
Surprisingly, Sterling speculative net shorts were largely unchanged, despite the currency surging over 5% to 1.28 during the reporting period, which in turn may suggest that GBP bears are somewhat complacent. As such, risks remain firmly skewed to the upside for the Pound provided UK PM Johnson manages to pass his deal through parliament.
Canadian Dollar sentiment grew increasingly bullish with net longs doubling to $982mln amid recent better than expected Canadian data, most notably the strong labour market report. Elsewhere, antipodean currencies (AUD, NZD) saw net shorts boosted in which the New Zealand Dollar saw gross shorts rising nearly 2k contracts, further highlighting that bearish positioning in the Kiwi remains extreme and thus risks are asymmetrically tilted to the upside.
US Dollar
GBP/USD
NZD/USD
