The latest IMM data covers the week from 4 to 11 March 2014.
IMM data released last Friday showed that speculators added net EUR longs for the fifth consecutive week. The move this week reflects both the move to safe-haven currencies due to tumbling global risk sentiment and a surprisingly hawkish Draghi at the ECB meeting. However, from a positioning perspective, there are still no barriers for a move higher in EUR/USD. Note that on Friday, we sent out a FX Forecast Update in which we revised our 3M EUR/USD forecast to 1.42 (see FX Strategy – EUR/USD: Heading for 1.42, lower on FED/ECB in 12M, 14 March 2014). Overall USD positioning saw investors shred net-long positions and positioning is now no longer very stretched long.
Investors added net shorts in JPY in the week to 11 March. This is probably a consequence of the better-than-expected US non-farm payrolls affecting relative monetary policy expectations – effectively dominating the flight to safe havens effect which has influenced speculative JPY positioning during the emerging markets sell-off and the Ukrainian/Russian conflict. Total non-commercial JPY positioning is now back below the 10th percentile in a historical perspective.
Non-commercial positioning in CAD saw the largest change since the beginning of December 2013 as speculators shredded net shorts. The move probably reflects BoC’s unchanged rhetoric. Overall CAD positioning is at the 7th percentile in a historical perspective.
In commodities, speculators added net longs in wheat and corn while net shorts were added in copper, soybeans and Brent crude. While soybeans and oil positioning is still stretched long, copper positioning is looking increasingly stretched short.
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