Data in this report cover up to Tuesday Jan 26 & were released Friday Jan 29.
• IMM posioning data for the week through Tuesday suggest investors are less convinced by the USD’s bullish credenals these days. The aggregate bull bet on the USD dropped a lile over USD 1bn to USD26.2bn, the smallest aggregate posion re?ected in this data series since mid-October.
• The changes are somewhat surprising, we think, considering the central bank policy backdrop. Firstly, investors failed to add signi?cantly to their bearish bets on the EUR despite strong hints from ECB President Draghi last week that policy could be eased further. In fact, net bull bets on the EUR fell by USD1.4bn this week, mainly a re?econ of investors covering the EUR shorts. Speculave accounts connued to boost bull bets on the JPY, meanwhile, but (following today’s BoJ easing and JPY sell-o?) we assume this trend will reverse next week. Net JPY longs rose USD1.2bn through Tuesday to the highest in four years.
• A second surprise in this week’s posioning is the lack of change in net CAD bear bets. In fact, the net posioning edged a lile more CAD-negave through Tuesday, despite last week’s unchanged BoC decision. Investors were happy to fade the inial CAD rebound at least but may be less inclined to do so now. Bearish CAD bets remain at a relave extreme, suggesng plenty of room for the CAD to bounce.
• The IMM’s net short GBP posion was boosted by some 9k contracts this week (equang to a USD850 mn boost) as expectaons of BoE rate hike this year connue to fade.