JPY SENTIMENT TURNS BEARISH FOR THE FIRST TIME IN ‘16
Data in this report cover up to Tuesday November 29 & were released Friday December 2.
• The most important detail in this week’s CFTC sentiment report is the turn in JPY sentiment and its plunge into net short / bearish territory for the first time in 2016. Most other currencies saw limited changes with a modest deterioration in sentiment toward AUD, GBP, and CHF. The net short CAD position was unchanged and investors reduced risk on both sides. EUR and CHF net short positions were also flat w/w however investors added equally to both long and short positions. The aggregate USD long position climbed to a fresh multi-month high with a $2.8bn w/w gain to $26.3bn.
• Investors reduced CAD risk, paring both long and short positions for a second consecutive week while leaving the net short unchanged at $1.4bn. The AUD net long narrowed $0.7bn w/w to a fresh multi-month low, dropping almost entirely on the back of a decline in gross longs.
• Net short EUR sentiment was unchanged for a second consecutive week as investors added equally to positions on both sides. These newly established positions will be vulnerable to adjustment in the event of a breakout in spot. The net short $15.9bn position is still around the middle of the one year range and remains well off the extended $24.3bn short from December 1, 2015.
• JPY sentiment has fallen into bearish territory for the first time in 2016, deteriorating on the back of a sizeable $1.3bn w/w build in gross shorts. The JPY net was last bearish late 2012-early 2016.
The major currency that improved against the US dollar last week was just the euro (+108 weekly change in contracts).
The currencies whose speculative bets declined last week versus the dollar were the Japanese yen (-11,169 contracts), Australian dollar (-9,748 contracts), Mexican peso (-6,186 contracts), British pound sterling (-3,817 contracts), Swiss franc (-1,434 contracts), New Zealand dollar (-1,339 contracts) and the Canadian dollar (-1,114 contracts).