Data in this report cover up to Tuesday March 14, ahead of the FOMC & were released Friday March 17.
• The net short GBP position has deteriorated for a sixth consecutive week and has pushed to a fresh record on the back of an acceleration in bearish sentiment. The G4 remain the largest held net shorts against the USD.
This week’s changes in sentiment were also dominated by the G4, with a sizeable narrowing in the net EUR short and a second consecutive weekly deterioration in the net JPY short (table below).
Commodity currencies CAD and AUD also suffered on a w/w basis, their second consecutive week of deterioration. The cumulative impact delivered a modest $1.4 w/w build in the aggregate USD long with a rise to $18.1bn—its highest level since early February .
• Positioning adjustments in CAD and AUD are suggestive of a broader turn with a second consecutive week of deteriorating sentiment.
For CAD, the details hint to a build in risk with a 9th consecutive weekly build in bullish gross longs, offset this week by a sizeable build in gross shorts—at the most aggressive pace since July 2015. Investors have pared AUD risk for a second week.
• EUR sentiment is bearish but fading, with an impressive $2.4bn w/ w narrowing in the net short to $5.4bn—its smallest since May 2016.
In terms of details, we note that bullish gross longs have pushed to a record 148K contracts.