Weekly CoT Sentiment Update for Major FX, Commodities, and Indices

September 10, 2018

Weekly CoT Sentiment Update for Major FX, Commodities, and Indices

COT HIGHLIGHTS:

No really notable changes, recent relative extremes persist
USD traders took a break from buying, snapped 18-week streak
Large spec profiles for major currencies and markets

Friday’s report wasn’t particular eventful, with no major changes in market positioning. Large dollar speculators finally took a break from adding to their bullish exposure, snapping the 18-week streak of net-purchases. The largest change in FX was in the euro contract, where net positioning flipped back to long by nearly 8k contracts.

British pound, Canadian dollar, Swiss franc, and Australian dollar large specs also saw net-buying, while shorts were added to Japanese yen and New Zealand dollar positions. Precious metal contracts saw more selling, with both gold and silver extending further into net-short territory. Large specs recently turned net-short gold for the first time since August 2002.

Generally speaking, USD-bullish bets remain intact and relatively extreme when looking back over recent history; EUR, CHF, AUD, NZD, and GBP positions are in the bottom 20% of their 52-week range, with CHF coming off an extreme not seen since 2007 and AUD since 2015. If the dollar is to continue to rally we may see a little more digestion and retraction in bullish sentiment first.

Every Friday the CFTC releases a detailed report of traders’ positioning in the futures market as reported for the week ending on Tuesday. Outlined in the table below are key stats concerning the positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders largely employ trend-following strategies, and as such, their net long exposure typically increases in uptrends while net short positioning increases in downtrends. When analyzing the data, we take into consideration the direction of their position, magnitude of changes, as well as extremes.

Key stats: Net position, one-week change, and where the current position stands relative to the past 52 weeks.