The latest IMM data covers the week from 16 September to 22 September 2015.
Short EUR/USD became a slightly less crowded trade in the week ending 22 September albeit overall positioning remains stretched on EUR shorts and USD longs. However, we stress that room remains in the money market for pricing in a December rate hike from the Fed. We continue to see USD upside from this angle despite positioning already being tight in this direction.
Some JPY shorts were unwound last week and, on the whole, yen positioning is close to neutral. This highlights the room for JPY downside should markets accelerate speculation that the Bank of Japan may be forced to deliver more easing following the recent stream of dire news on both the domestic and Chinese economy.
In contrast, CHF longs were unwound and non-commercial positioning is now marginally net short the Swissie (neutral territory). We stress that the franc could see support vis-a-vis the single currency if markets become more aggressive on pricing more easing in from the ECB given the SNB's lack of effective instruments to fight EUR/CHF downside.
Oil longs were capped last week but positioning remains in neutral-to-stretched long territory - oil prices have failed to move higher on a sustained basis but we do not envisage significant drops from here. Oil currencies such as RUB and CAD saw shorts added last week while MXN became somewhat less stretched on shorts. The Mexican authorities are likely to continue to mitigate the currency slide by means of intervention.
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