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Rates Spark: Near-term balance of risks still tilted towards higher rates

Markets are geared for dovish outcomes this week, not just in rates where still notable probabilities are discounted for first cuts as early as March, but also across wider risk markets. This sets up markets for disppointments if they don't get exactly what they want. Data is a wild card, but the ECB will have this in mind if it is earnest about pushback.

 

Near-term balance of risks still tilted towards higher rates

The Swing Overview – Week 25 2022

The Swing Overview – Week 25 2022

Purple Trading Purple Trading 27.06.2022 13:52
The Swing Overview – Week 25 There was a rather quiet week in which the major world stock indices shook off previous losses and have been slowly rising since Monday. However, this is probably only a temporary correction of the current bearish trend.  The CNB Bank Board met for the last time in its old composition and raised the interest rate to 7%, the highest level since 1999. However, the koruna barely reacted to this increase. The reason is that the main risks are still in place and fear of a recession keeps the markets in a risk-off sentiment that benefits the US dollar. Macroeconomic data We had a bit of a quiet week when it comes to macroeconomic data in the US. Industrial production data was reported, which grew by 0.2% month-on-month in May, which is less than the growth seen in April, when production grew by 1.4%. While the growth is slower than expected, it is still growth, which is a positive thing.   In terms of labor market data, the number of jobless claims held steady last week, reaching 229k. Thus, compared to the previous week, the number of claims fell by 2 thousand.   The US Dollar took a break in this quiet week and came down from its peak which is at 106, 86. Overall, however, the dollar is still in an uptrend. The US 10-year bond yields also fell last week and are currently hovering around 3%. The fall in bond yields was then a positive boost for equity indices. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The SP 500 index has been gaining since Monday, June 20, 2022. However, this is probably not a signal of a major bullish reversal. Fundamental reasons still rather speak for a weakening and so it could be a short-term correction of the current bearish trend. The rise is probably caused by long-term investors who were buying the dip. Next week the US will report the GDP data which could be the catalyst for further movement.  Figure 2: The SP 500 on H4 and D1 chart   The index has currently reached the resistance level according to the H4 chart, which is in the region of 3,820 - 3,836. The next strong resistance is then in the area of 3,870 - 3,900 where the previous support was broken and turned into the resistance. The current nearest support is 3 640 - 3 670.    German DAX index The manufacturing PMI for June came in at 52.0. The previous month's PMI was 54.8. While a value above 50 indicates an expected expansion, it must be said that the PMI has essentially been declining since February 2022. This, together with other data coming out of Germany, suggests a certain pessimism, which is also reflected in the DAX index. Figure 3: German DAX index on H4 and daily chart The DAX broke support according to the H4 chart at 12,950 - 12,980 but then broke back above that level, so we don't have a valid breakout. Overall, however, the DAX is in a downtrend and the technical analysis does not show a stronger sign of a reversal of this trend yet. The nearest resistance according to the H4 chart is 13,130 - 13,190. The next resistance is then at 13 420 - 13 440. Strong support according to the daily chart is 12,443 - 12,600.   Eurozone inflation at a new record Consumer inflation in the Eurozone for May rose by 8.1% year-on-year as expected by analysts. On a month-on-month basis, inflation added 0.8% compared to April. The rise in inflation could support the ECB's decision to raise rates possibly by more than the 0.25% expected so far, which is expected to happen at the July meeting.  Figure 4: EUR/USD on H4 and daily chart From a technical perspective, the euro has bounced off support on the pair with the US dollar according to the daily chart, which is in the 1.0340 - 1.0370 range and continues to strengthen. Overall, however, the pair is still in a downtrend. The US Fed has been much more aggressive in fighting inflation than the ECB and this continues to put pressure on the bearish trend in the euro. The nearest resistance according to the H4 chart is at 1.058 - 1.0600. Strong resistance according to the daily chart is at 1.0780 - 1.0800.   The Czech National Bank raised the interest rate again Rising inflation, which has already reached 16% in the Czech Republic, forced the CNB's board to raise interest rates again. The key interest rate is now at 7%. The last time the interest rate was this high was in 1999. This is the last decision of the old Bank Board. In August, the new board, which is not clearly hawkish, will decide on monetary policy. Therefore, it will be very interesting to see how they approach the rising inflation.   The current risks, according to the CNB, are higher price growth at home and abroad, the risk of a halt in energy supplies from Russia and generally rising inflation expectations. The lingering risk is, of course, the war in Ukraine. The CNB has also decided to continue intervening in the market to keep the Czech koruna exchange rate within acceptable limits and prevent it from depreciating, which would increase import inflation pressures. Figure 5: The USD/CZK and The EUR/CZK on the daily chart Looking at the charts, the koruna hardly reacted at all to the CNB's decision to raise rates sharply. Against the dollar, the koruna is weakening somewhat, while against the euro the koruna is holding its value around 24.60 - 24.80. The appreciation of the koruna after the interest rate hike was probably prevented by uncertainty about how the new board will treat inflation, and also by the fact that there is a risk-off sentiment in global markets and investors prefer so-called safe havens in such cases, which include the US dollar.  
COT Week 26 Charts: Stock Market Speculators bets dropped this week led by S&P500 Mini & Nasdaq Mini

COT Week 26 Charts: Stock Market Speculators bets dropped this week led by S&P500 Mini & Nasdaq Mini

Invest Macro Invest Macro 02.07.2022 16:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower this week as three out of the eight stock markets we cover had very small gains in positioning this week while five markets had lower contracts. Leading the gains for stock markets was Russell 2000 Mini (976 contracts) with the Dow Jones Industrial Average Mini (400 contracts) and VIX (354 contracts) also showing a positive weeks. Meanwhile, leading the decreases in speculator bets this week were the S&P500 Mini (-24,907 contracts) and the Nasdaq Mini (-6,616 contracts) with the MSCI Emerging Markets Mini (-6,141 contracts), MSCI EAFE Mini (-2,182 contracts) and Nikkei 225 USD (-23 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Nasdaq Mini leads currently with an extreme bullish score of 89 percent. The VIX is also at an extreme bullish score of 84.4 percent while on the downside, the Russell 2000 Mini (1 percent) and the Dow Jones Mini (4.6 percent) are both in extreme bearish positions. Strength score trends (or move index, that calculates the 6-week changes in strength scores) show that the Nikkei 225 Yen (15 percent), Nasdaq Mini (5 percent) and the Nikkei 225 USD (2 percent) are the only markets with rising scores over the past six weeks. The S&P Mini (-38 percent) and the Russell 2000 Mini (-21 percent) lead the downward trends of strength scores. Data Snapshot of Stock Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,248,771 6 -139,226 30 168,405 96 -29,179 20 Nikkei 225 13,442 8 -1,615 70 2,101 40 -486 22 Nasdaq-Mini 248,045 41 24,190 89 -19,930 14 -4,260 40 DowJones-Mini 66,759 23 -25,073 5 29,675 99 -4,602 14 VIX 257,123 14 -49,569 84 56,789 17 -7,220 56 Nikkei 225 Yen 56,111 38 2,330 41 24,398 87 -26,728 20   VIX Volatility Futures: The VIX Volatility large speculator standing this week resulted in a net position of -49,569 contracts in the data reported through Tuesday. This was a weekly advance of 354 contracts from the previous week which had a total of -49,923 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 84.4 percent. The commercials are Bearish-Extreme with a score of 16.7 percent and the small traders (not shown in chart) are Bullish with a score of 56.3 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.4 54.5 8.6 – Percent of Open Interest Shorts: 36.7 32.4 11.4 – Net Position: -49,569 56,789 -7,220 – Gross Longs: 44,726 140,039 22,123 – Gross Shorts: 94,295 83,250 29,343 – Long to Short Ratio: 0.5 to 1 1.7 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 84.4 16.7 56.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.0 4.2 6.6   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week resulted in a net position of -139,226 contracts in the data reported through Tuesday. This was a weekly decrease of -24,907 contracts from the previous week which had a total of -114,319 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.4 percent. The commercials are Bullish-Extreme with a score of 96.1 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.0 76.8 10.0 – Percent of Open Interest Shorts: 17.2 69.3 11.3 – Net Position: -139,226 168,405 -29,179 – Gross Longs: 248,313 1,726,190 223,854 – Gross Shorts: 387,539 1,557,785 253,033 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 30.4 96.1 20.2 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -38.1 39.6 -3.2   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week resulted in a net position of -25,073 contracts in the data reported through Tuesday. This was a weekly lift of 400 contracts from the previous week which had a total of -25,473 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.6 percent. The commercials are Bullish-Extreme with a score of 98.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.8 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.5 70.5 14.9 – Percent of Open Interest Shorts: 51.1 26.1 21.8 – Net Position: -25,073 29,675 -4,602 – Gross Longs: 9,011 47,089 9,948 – Gross Shorts: 34,084 17,414 14,550 – Long to Short Ratio: 0.3 to 1 2.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.6 98.9 13.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.0 4.9 -12.8   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week resulted in a net position of 24,190 contracts in the data reported through Tuesday. This was a weekly fall of -6,616 contracts from the previous week which had a total of 30,806 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.5 percent. The commercials are Bearish-Extreme with a score of 14.2 percent and the small traders (not shown in chart) are Bearish with a score of 39.7 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.8 51.9 14.3 – Percent of Open Interest Shorts: 22.1 59.9 16.0 – Net Position: 24,190 -19,930 -4,260 – Gross Longs: 78,987 128,769 35,528 – Gross Shorts: 54,797 148,699 39,788 – Long to Short Ratio: 1.4 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 88.5 14.2 39.7 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.0 -6.6 3.5   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week resulted in a net position of -104,620 contracts in the data reported through Tuesday. This was a weekly increase of 976 contracts from the previous week which had a total of -105,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.6 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.0 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.2 88.3 3.3 – Percent of Open Interest Shorts: 25.6 69.0 4.2 – Net Position: -104,620 109,982 -5,362 – Gross Longs: 41,196 503,528 18,674 – Gross Shorts: 145,816 393,546 24,036 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.6 100.0 11.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.1 20.1 -4.1   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week resulted in a net position of -1,615 contracts in the data reported through Tuesday. This was a weekly reduction of -23 contracts from the previous week which had a total of -1,592 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.8 percent. The commercials are Bearish with a score of 40.1 percent and the small traders (not shown in chart) are Bearish with a score of 22.2 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.4 52.1 16.2 – Percent of Open Interest Shorts: 43.4 36.5 19.8 – Net Position: -1,615 2,101 -486 – Gross Longs: 4,220 7,007 2,177 – Gross Shorts: 5,835 4,906 2,663 – Long to Short Ratio: 0.7 to 1 1.4 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.8 40.1 22.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.5 -10.4 22.2   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week resulted in a net position of -1,986 contracts in the data reported through Tuesday. This was a weekly decrease of -2,182 contracts from the previous week which had a total of 196 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.8 percent. The commercials are Bullish with a score of 79.9 percent and the small traders (not shown in chart) are Bearish with a score of 40.7 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 92.2 2.0 – Percent of Open Interest Shorts: 5.6 92.3 1.3 – Net Position: -1,986 -510 2,496 – Gross Longs: 19,973 360,111 7,717 – Gross Shorts: 21,959 360,621 5,221 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 21.8 79.9 40.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.5 0.5 6.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 26 Charts: Energy Speculator bets mostly higher led by WTI Crude Oil & Natural Gas

COT Week 26 Charts: Energy Speculator bets mostly higher led by WTI Crude Oil & Natural Gas

Invest Macro Invest Macro 02.07.2022 17:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were mostly higher this week as four out of the six energy markets we cover had higher positioning this week while two markets had lower contracts. Leading the gains for energy markets was WTI Crude Oil (10,190 contracts) and Natural Gas (1,450 contracts) with the Bloomberg Commodity Index (703 contracts) and Gasoline (692 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week was Brent Crude Oil (-4,667 contracts) with Heating Oil (-2,056 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Bloomberg Commodity Index (79 percent) and Heating Oil (54 percent) are above the midpoint for the past 3 years while all the other markets are below the 50 percent level. Gasoline and WTI Crude are in extreme bearish positions as each come in at 3 percent currently. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Heating Oil (16 percent) and the Bloomberg Commodity Index (9 percent) are also the only markets that have rising trend scores currently. Brent Crude Oil (-13 percent) and WTI Crude (-9 percent) are leading the downside trends. Data Snapshot of Commodity Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,651,566 0 299,692 3 -327,938 99 28,246 55 Gold 497,005 13 157,693 2 -182,007 98 24,314 16 Silver 135,775 3 10,891 0 -18,485 100 7,594 0 Copper 182,352 14 -30,696 20 31,197 81 -501 22 Palladium 7,765 6 -3,825 1 4,441 100 -616 8 Platinum 68,232 36 -1,306 2 -3,381 100 4,687 27 Natural Gas 987,740 0 -129,419 40 90,840 60 38,579 71 Brent 173,920 19 -42,677 40 41,434 62 1,243 26 Heating Oil 269,168 23 7,508 53 -25,743 44 18,235 62 Soybeans 653,337 11 137,193 56 -106,705 52 -30,488 20 Corn 1,338,054 0 328,102 72 -274,110 33 -53,992 12 Coffee 194,896 2 45,200 78 -47,147 26 1,947 9 Sugar 734,324 0 122,709 62 -132,877 43 10,168 20 Wheat 291,041 0 7,679 29 -1,871 57 -5,808 80   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week resulted in a net position of 299,692 contracts in the data reported through Tuesday. This was a weekly advance of 10,190 contracts from the previous week which had a total of 289,502 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.4 percent. The commercials are Bullish-Extreme with a score of 98.6 percent and the small traders (not shown in chart) are Bullish with a score of 54.8 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.0 36.3 4.9 – Percent of Open Interest Shorts: 5.8 56.2 3.2 – Net Position: 299,692 -327,938 28,246 – Gross Longs: 396,046 599,957 80,880 – Gross Shorts: 96,354 927,895 52,634 – Long to Short Ratio: 4.1 to 1 0.6 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 3.4 98.6 54.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.7 12.6 -14.1   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week resulted in a net position of -42,677 contracts in the data reported through Tuesday. This was a weekly decline of -4,667 contracts from the previous week which had a total of -38,010 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.6 percent. The commercials are Bullish with a score of 62.2 percent and the small traders (not shown in chart) are Bearish with a score of 26.0 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.8 53.8 3.6 – Percent of Open Interest Shorts: 39.3 30.0 2.9 – Net Position: -42,677 41,434 1,243 – Gross Longs: 25,712 93,538 6,241 – Gross Shorts: 68,389 52,104 4,998 – Long to Short Ratio: 0.4 to 1 1.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.6 62.2 26.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -13.1 15.5 -20.3   Natural Gas Futures: The Natural Gas Futures large speculator standing this week resulted in a net position of -129,419 contracts in the data reported through Tuesday. This was a weekly advance of 1,450 contracts from the previous week which had a total of -130,869 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.7 percent. The commercials are Bullish with a score of 59.5 percent and the small traders (not shown in chart) are Bullish with a score of 71.5 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.6 40.8 6.3 – Percent of Open Interest Shorts: 33.7 31.6 2.4 – Net Position: -129,419 90,840 38,579 – Gross Longs: 203,204 402,705 62,574 – Gross Shorts: 332,623 311,865 23,995 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.7 59.5 71.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.3 8.4 -28.5   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week resulted in a net position of 32,099 contracts in the data reported through Tuesday. This was a weekly advance of 692 contracts from the previous week which had a total of 31,407 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.8 percent. The commercials are Bullish-Extreme with a score of 94.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.7 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.6 53.7 8.0 – Percent of Open Interest Shorts: 15.4 68.4 4.4 – Net Position: 32,099 -42,454 10,355 – Gross Longs: 76,657 154,967 23,177 – Gross Shorts: 44,558 197,421 12,822 – Long to Short Ratio: 1.7 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.8 94.6 81.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.7 4.3 -17.4   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week resulted in a net position of 7,508 contracts in the data reported through Tuesday. This was a weekly fall of -2,056 contracts from the previous week which had a total of 9,564 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.5 percent. The commercials are Bearish with a score of 43.9 percent and the small traders (not shown in chart) are Bullish with a score of 61.5 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.5 52.6 14.9 – Percent of Open Interest Shorts: 13.7 62.1 8.2 – Net Position: 7,508 -25,743 18,235 – Gross Longs: 44,423 141,515 40,222 – Gross Shorts: 36,915 167,258 21,987 – Long to Short Ratio: 1.2 to 1 0.8 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.5 43.9 61.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 16.0 -9.9 -5.4   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week resulted in a net position of -7,349 contracts in the data reported through Tuesday. This was a weekly gain of 703 contracts from the previous week which had a total of -8,052 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.4 percent. The commercials are Bearish with a score of 20.4 percent and the small traders (not shown in chart) are Bearish with a score of 21.6 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.6 68.6 0.7 – Percent of Open Interest Shorts: 38.8 57.9 0.2 – Net Position: -7,349 7,041 308 – Gross Longs: 18,077 45,029 456 – Gross Shorts: 25,426 37,988 148 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.4 20.4 21.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.8 -7.5 -13.1   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 26 Charts: Soft Commodities Speculators bets drop sharply led by Corn, Soybeans & Sugar

COT Week 26 Charts: Soft Commodities Speculators bets drop sharply led by Corn, Soybeans & Sugar

Invest Macro Invest Macro 02.07.2022 18:20
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets were sharply lower this week as just two out of the eleven soft commodities markets we cover had higher positioning this week while nine markets had lower contracts. Leading the gains for soft commodities markets was Lean Hogs (4,228 contracts) and Cocoa (3,034 contracts) as the only markets showing positive weeks. Meanwhile, leading the declines in speculator bets this week were Corn (-52,067 contracts), Soybeans (-41,186 contracts) and Sugar (-40,402 contracts) with Soybean Oil (-22,612 contracts), Live Cattle (-12,287 contracts), Wheat (-11,388 contracts), Cotton (-9,655 contracts), Coffee (-4,171 contracts) and Soybean Meal (-1,446 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that Soybean Meal (80 percent) is leading the speculator strength positions at an extreme bullish score. Coffee (78 percent) and Corn (72 percent) are the next highest in strength scores. Live Cattle (14 percent) is the lone extreme bearish market with Cocoa (24 percent) coming in as the next lowest. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows the trends for soft commodities are on the downside with eight out of the eleven markets showing negative trends. Soybean Oil (-34 percent) and Wheat (-28 percent) are leading the negative scores currently. The only markets with positive scores this week are Coffee (6 percent), Lean Hogs (9 percent) and Soybean Meal (12 percent). Data Snapshot of Commodity Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,651,566 0 299,692 3 -327,938 99 28,246 55 Gold 497,005 13 157,693 2 -182,007 98 24,314 16 Silver 135,775 3 10,891 0 -18,485 100 7,594 0 Copper 182,352 14 -30,696 20 31,197 81 -501 22 Palladium 7,765 6 -3,825 1 4,441 100 -616 8 Platinum 68,232 36 -1,306 2 -3,381 100 4,687 27 Natural Gas 987,740 0 -129,419 40 90,840 60 38,579 71 Brent 173,920 19 -42,677 40 41,434 62 1,243 26 Heating Oil 269,168 23 7,508 53 -25,743 44 18,235 62 Soybeans 653,337 11 137,193 56 -106,705 52 -30,488 20 Corn 1,338,054 0 328,102 72 -274,110 33 -53,992 12 Coffee 194,896 2 45,200 78 -47,147 26 1,947 9 Sugar 734,324 0 122,709 62 -132,877 43 10,168 20 Wheat 291,041 0 7,679 29 -1,871 57 -5,808 80   CORN Futures: The CORN large speculator standing this week came in at a net position of 328,102 contracts in the data reported through Tuesday. This was a weekly reduction of -52,067 contracts from the previous week which had a total of 380,169 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 71.9 percent. The commercials are Bearish with a score of 32.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.0 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.4 44.6 9.4 – Percent of Open Interest Shorts: 7.9 65.1 13.4 – Net Position: 328,102 -274,110 -53,992 – Gross Longs: 433,710 597,265 125,886 – Gross Shorts: 105,608 871,375 179,878 – Long to Short Ratio: 4.1 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 71.9 32.9 12.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.6 21.4 -2.9   SUGAR Futures: The SUGAR large speculator standing this week came in at a net position of 122,709 contracts in the data reported through Tuesday. This was a weekly lowering of -40,402 contracts from the previous week which had a total of 163,111 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 61.8 percent. The commercials are Bearish with a score of 43.0 percent and the small traders (not shown in chart) are Bearish with a score of 20.4 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.7 49.2 9.1 – Percent of Open Interest Shorts: 12.0 67.3 7.7 – Net Position: 122,709 -132,877 10,168 – Gross Longs: 210,575 361,005 66,813 – Gross Shorts: 87,866 493,882 56,645 – Long to Short Ratio: 2.4 to 1 0.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 61.8 43.0 20.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.2 21.3 -47.7   COFFEE Futures: The COFFEE large speculator standing this week came in at a net position of 45,200 contracts in the data reported through Tuesday. This was a weekly decrease of -4,171 contracts from the previous week which had a total of 49,371 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.9 percent. The commercials are Bearish with a score of 26.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.5 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.5 49.4 4.1 – Percent of Open Interest Shorts: 5.3 73.6 3.1 – Net Position: 45,200 -47,147 1,947 – Gross Longs: 55,545 96,232 8,006 – Gross Shorts: 10,345 143,379 6,059 – Long to Short Ratio: 5.4 to 1 0.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 77.9 26.5 9.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.8 -5.6 -5.2   SOYBEANS Futures: The SOYBEANS large speculator standing this week came in at a net position of 137,193 contracts in the data reported through Tuesday. This was a weekly lowering of -41,186 contracts from the previous week which had a total of 178,379 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.9 percent. The commercials are Bullish with a score of 51.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.5 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.3 52.5 5.9 – Percent of Open Interest Shorts: 8.3 68.9 10.5 – Net Position: 137,193 -106,705 -30,488 – Gross Longs: 191,380 343,227 38,323 – Gross Shorts: 54,187 449,932 68,811 – Long to Short Ratio: 3.5 to 1 0.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 55.9 51.7 19.5 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.1 15.0 -6.4   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week came in at a net position of 44,918 contracts in the data reported through Tuesday. This was a weekly reduction of -22,612 contracts from the previous week which had a total of 67,530 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.9 percent. The commercials are Bullish with a score of 63.7 percent and the small traders (not shown in chart) are Bearish with a score of 44.4 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.7 55.7 8.4 – Percent of Open Interest Shorts: 10.3 70.4 6.1 – Net Position: 44,918 -53,225 8,307 – Gross Longs: 82,491 202,343 30,416 – Gross Shorts: 37,573 255,568 22,109 – Long to Short Ratio: 2.2 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 35.9 63.7 44.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -34.2 38.6 -48.9   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week came in at a net position of 93,925 contracts in the data reported through Tuesday. This was a weekly lowering of -1,446 contracts from the previous week which had a total of 95,371 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.8 percent. The commercials are Bearish with a score of 23.2 percent and the small traders (not shown in chart) are Bearish with a score of 42.3 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.3 43.5 11.4 – Percent of Open Interest Shorts: 3.3 72.8 6.0 – Net Position: 93,925 -114,869 20,944 – Gross Longs: 106,995 170,250 44,567 – Gross Shorts: 13,070 285,119 23,623 – Long to Short Ratio: 8.2 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.8 23.2 42.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.5 -7.4 -33.0   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week came in at a net position of 27,835 contracts in the data reported through Tuesday. This was a weekly fall of -12,287 contracts from the previous week which had a total of 40,122 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.3 percent. The commercials are Bullish with a score of 76.2 percent and the small traders (not shown in chart) are Bullish with a score of 79.2 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.0 39.4 11.2 – Percent of Open Interest Shorts: 25.1 49.1 11.5 – Net Position: 27,835 -27,080 -755 – Gross Longs: 98,030 110,513 31,369 – Gross Shorts: 70,195 137,593 32,124 – Long to Short Ratio: 1.4 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 14.3 76.2 79.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.0 5.9 9.9   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week came in at a net position of 16,287 contracts in the data reported through Tuesday. This was a weekly gain of 4,228 contracts from the previous week which had a total of 12,059 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 24.5 percent. The commercials are Bullish-Extreme with a score of 84.8 percent and the small traders (not shown in chart) are Bullish with a score of 50.1 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.9 41.6 9.7 – Percent of Open Interest Shorts: 24.2 45.5 14.5 – Net Position: 16,287 -7,339 -8,948 – Gross Longs: 61,378 77,472 18,100 – Gross Shorts: 45,091 84,811 27,048 – Long to Short Ratio: 1.4 to 1 0.9 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 24.5 84.8 50.1 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.3 -5.5 -19.9   COTTON Futures: The COTTON large speculator standing this week came in at a net position of 56,390 contracts in the data reported through Tuesday. This was a weekly reduction of -9,655 contracts from the previous week which had a total of 66,045 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.6 percent. The commercials are Bearish with a score of 41.9 percent and the small traders (not shown in chart) are Bearish with a score of 46.8 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.4 40.3 7.6 – Percent of Open Interest Shorts: 9.3 75.6 4.5 – Net Position: 56,390 -61,856 5,466 – Gross Longs: 72,622 70,585 13,385 – Gross Shorts: 16,232 132,441 7,919 – Long to Short Ratio: 4.5 to 1 0.5 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 58.6 41.9 46.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.6 17.0 -38.7   COCOA Futures: The COCOA large speculator standing this week came in at a net position of 6,339 contracts in the data reported through Tuesday. This was a weekly lift of 3,034 contracts from the previous week which had a total of 3,305 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.8 percent. The commercials are Bullish with a score of 77.4 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 44.3 4.5 – Percent of Open Interest Shorts: 28.1 47.1 3.7 – Net Position: 6,339 -8,708 2,369 – Gross Longs: 91,654 134,441 13,610 – Gross Shorts: 85,315 143,149 11,241 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.8 77.4 20.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -12.0 14.6 -27.2   WHEAT Futures: The WHEAT large speculator standing this week came in at a net position of 7,679 contracts in the data reported through Tuesday. This was a weekly decrease of -11,388 contracts from the previous week which had a total of 19,067 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.0 percent. The commercials are Bullish with a score of 57.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 80.3 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.9 40.8 10.1 – Percent of Open Interest Shorts: 28.3 41.5 12.1 – Net Position: 7,679 -1,871 -5,808 – Gross Longs: 89,989 118,839 29,465 – Gross Shorts: 82,310 120,710 35,273 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.0 57.0 80.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -27.5 34.3 -15.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 26 Charts: Precious Metals Speculators bets head lower led by Copper & Silver

COT Week 26 Charts: Precious Metals Speculators bets head lower led by Copper & Silver

Invest Macro Invest Macro 02.07.2022 19:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The COT metals market speculator bets were overall lower this week as just one out of the six metals markets we cover had higher positioning this week while five markets had lower contracts. The only precious metals market with higher speculator bets was Palladium with a net gain of just 221 contracts on the week. Leading the declines in speculator bets this week were Copper (-9,758 contracts) and Silver (-7,528 contracts) with Gold (-5,594 contracts) and Platinum (-2,797 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that all of the metals are in bearish extreme levels at the moment. Copper (20 percent) is at the highest level of all but still right at the cusp of the bearish extreme level while all the other metals are at just 2 percent or under, signifying that these are right at the bottom of their 3-year speculator sentiment range.   Strength score trends (or move index, that calculate 6-week changes in strength scores) show a similar picture as well with all the metals seeing downtrends for the past six weeks. Gold at -9 percent is leading the trends lower followed by Silver at -8 percent with the other metals all at -5 percent or lower.   Data Snapshot of Commodity Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,651,566 0 299,692 3 -327,938 99 28,246 55 Gold 497,005 13 157,693 2 -182,007 98 24,314 16 Silver 135,775 3 10,891 0 -18,485 100 7,594 0 Copper 182,352 14 -30,696 20 31,197 81 -501 22 Palladium 7,765 6 -3,825 1 4,441 100 -616 8 Platinum 68,232 36 -1,306 2 -3,381 100 4,687 27 Natural Gas 987,740 0 -129,419 40 90,840 60 38,579 71 Brent 173,920 19 -42,677 40 41,434 62 1,243 26 Heating Oil 269,168 23 7,508 53 -25,743 44 18,235 62 Soybeans 653,337 11 137,193 56 -106,705 52 -30,488 20 Corn 1,338,054 0 328,102 72 -274,110 33 -53,992 12 Coffee 194,896 2 45,200 78 -47,147 26 1,947 9 Sugar 734,324 0 122,709 62 -132,877 43 10,168 20 Wheat 291,041 0 7,679 29 -1,871 57 -5,808 80   Gold Comex Futures: The Gold Comex Futures large speculator standing this week recorded a net position of 157,693 contracts in the data reported through Tuesday. This was a weekly fall of -5,594 contracts from the previous week which had a total of 163,287 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.6 percent. The commercials are Bullish-Extreme with a score of 98.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 16.1 percent. Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 54.1 23.5 9.0 – Percent of Open Interest Shorts: 22.3 60.2 4.1 – Net Position: 157,693 -182,007 24,314 – Gross Longs: 268,712 117,038 44,823 – Gross Shorts: 111,019 299,045 20,509 – Long to Short Ratio: 2.4 to 1 0.4 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 1.6 98.3 16.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.9 12.0 -25.7   Silver Comex Futures: The Silver Comex Futures large speculator standing this week recorded a net position of 10,891 contracts in the data reported through Tuesday. This was a weekly decrease of -7,528 contracts from the previous week which had a total of 18,419 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 39.0 40.8 16.7 – Percent of Open Interest Shorts: 31.0 54.4 11.1 – Net Position: 10,891 -18,485 7,594 – Gross Longs: 52,932 55,406 22,724 – Gross Shorts: 42,041 73,891 15,130 – Long to Short Ratio: 1.3 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 0.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.8 7.7 -5.8   Copper Grade #1 Futures: The Copper Grade #1 Futures large speculator standing this week recorded a net position of -30,696 contracts in the data reported through Tuesday. This was a weekly decrease of -9,758 contracts from the previous week which had a total of -20,938 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.3 percent. The commercials are Bullish-Extreme with a score of 80.9 percent and the small traders (not shown in chart) are Bearish with a score of 22.4 percent. Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.2 56.8 8.0 – Percent of Open Interest Shorts: 43.0 39.7 8.2 – Net Position: -30,696 31,197 -501 – Gross Longs: 47,782 103,666 14,516 – Gross Shorts: 78,478 72,469 15,017 – Long to Short Ratio: 0.6 to 1 1.4 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 20.3 80.9 22.4 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.5 5.6 -10.7   Platinum Futures: The Platinum Futures large speculator standing this week recorded a net position of -1,306 contracts in the data reported through Tuesday. This was a weekly decrease of -2,797 contracts from the previous week which had a total of 1,491 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.5 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.4 percent. Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.7 41.6 12.5 – Percent of Open Interest Shorts: 43.6 46.6 5.6 – Net Position: -1,306 -3,381 4,687 – Gross Longs: 28,451 28,413 8,503 – Gross Shorts: 29,757 31,794 3,816 – Long to Short Ratio: 1.0 to 1 0.9 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 1.5 100.0 27.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.0 4.6 2.7   Palladium Futures: The Palladium Futures large speculator standing this week recorded a net position of -3,825 contracts in the data reported through Tuesday. This was a weekly rise of 221 contracts from the previous week which had a total of -4,046 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.3 percent. The commercials are Bullish-Extreme with a score of 99.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 8.2 percent. Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.8 73.1 11.5 – Percent of Open Interest Shorts: 64.0 15.9 19.4 – Net Position: -3,825 4,441 -616 – Gross Longs: 1,146 5,674 893 – Gross Shorts: 4,971 1,233 1,509 – Long to Short Ratio: 0.2 to 1 4.6 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 1.3 99.6 8.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.4 4.6 -12.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Currency Speculators reduced their British Pound and Japanese Yen bearish bets to multi-week lows

Currency Speculators reduced their British Pound and Japanese Yen bearish bets to multi-week lows

Invest Macro Invest Macro 02.07.2022 20:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Currency market speculator bets were mostly higher this week as seven out of the eleven currency markets we cover had higher positioning while four markets had lower contracts. Leading the gains for currency markets was the Mexican peso (12,890 contracts) and the British pound sterling (10,129 contracts) with the Japanese yen (5,884 contracts), Euro (5,009 contracts), Canadian dollar (4,992 contracts), New Zealand dollar (112 contracts) and Bitcoin (39 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were the Brazilian real (-7,317 contracts) and the Australian dollar (-2,374 contracts) with the US Dollar Index (-1,781 contracts) and the Swiss franc (-1,434 contracts) also registering lower bets on the week. Highlighting the currency contracts this week was the cool off in bearish bets for both the British pound and the Japanese yen. British pound sterling speculator positions rose for the fifth straight week and this week’s improvement pushed the overall position to the least bearish standing of the past eleven weeks. The GBP speculative standing has been in a continual bearish position since the middle of February but has come down from a total of -80,372 contracts on May 24th to a total of -53,118 contracts this week after the past five week’s improvement (by 27,254 contracts). The GBPUSD exchange rate has remained in a downtrend despite the recent cool off in speculator sentiment and touched below the 1.20 exchange this week for the second time this month. Japanese yen speculator bets rose for the seventh straight week this week and reached the least bearish position of the past 27 weeks. Japanese yen bets have been sharply bearish for over a year were at -110,454 contracts as recently as May 10th. The past seven weeks have shaved 57,884 contracts off the bearish level and brought the current speculative position to a total of -52,570 contracts this week. The exchange rate for the USDJPY currency pair remains at the top of its range (yen weakness) and near 20-year highs around 135.00. In other currency contracts, the US Dollar Index speculator positions slid a bit this week after rising for six out of the previous seven weeks. The Dollar Index spec position had hit a new 5-year high last week at over +45,000 contracts and was at a 100 percent strength score (measured against past 3-years spec positioning). This week’s decline doesn’t dent the overall position much as the net position remains over +43,000 contracts for the third straight week. The Dollar Index futures price has remained strongly in an uptrend and reached a high over 105 this week before closing just below that figure at 104.91.   Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bitcoin (100 percent), the US Dollar Index (97 percent) and the Brazilian real (87 percent) are currently near the top of their ranges and in bullish extreme levels. The Mexican peso at 21 percent is at the lowest strength level currently and followed by the Euro at 32 percent. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the Japanese yen (31 percent) is on the greatest move of the past six weeks. The Canadian dollar (27 percent), New Zealand dollar (21 percent) and the Swiss franc (20 percent) round out the top movers in the latest data. The Mexican peso at -18 percent leads the downtrending currencies followed by the Euro at -10 percent and the Brazilian real at -1 percent. Data Snapshot of Forex Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index USD Index 63,143 96 43,229 97 -46,558 2 3,329 53 EUR 671,472 70 -10,596 32 -19,812 70 30,408 25 GBP 228,736 57 -53,118 36 70,230 71 -17,112 20 JPY 213,767 64 -52,570 37 67,895 69 -15,325 22 CHF 40,123 21 -8,591 35 17,862 72 -9,271 26 CAD 142,584 25 9,097 50 -12,247 59 3,150 36 AUD 139,891 37 -42,980 45 47,163 54 -4,183 42 NZD 40,337 25 -5,311 62 8,551 44 -3,240 14 MXN 193,536 46 -13,980 21 9,107 77 4,873 64 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 60,107 54 37,028 87 -38,531 14 1,503 82 Bitcoin 13,707 78 1,085 100 -947 0 -138 10   US Dollar Index Futures: The US Dollar Index large speculator standing this week resulted in a net position of 43,229 contracts in the data reported through Tuesday. This was a weekly decline of -1,781 contracts from the previous week which had a total of 45,010 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 97.0 percent. The commercials are Bearish-Extreme with a score of 1.9 percent and the small traders (not shown in chart) are Bullish with a score of 52.9 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 86.5 3.7 8.5 – Percent of Open Interest Shorts: 18.1 77.4 3.2 – Net Position: 43,229 -46,558 3,329 – Gross Longs: 54,646 2,340 5,371 – Gross Shorts: 11,417 48,898 2,042 – Long to Short Ratio: 4.8 to 1 0.0 to 1 2.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 97.0 1.9 52.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.7 -11.2 0.4   Euro Currency Futures: The Euro Currency large speculator standing this week resulted in a net position of -10,596 contracts in the data reported through Tuesday. This was a weekly advance of 5,009 contracts from the previous week which had a total of -15,605 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.7 percent. The commercials are Bullish with a score of 70.4 percent and the small traders (not shown in chart) are Bearish with a score of 24.8 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.2 56.6 12.5 – Percent of Open Interest Shorts: 29.8 59.6 8.0 – Net Position: -10,596 -19,812 30,408 – Gross Longs: 189,414 380,084 83,853 – Gross Shorts: 200,010 399,896 53,445 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 31.7 70.4 24.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.5 9.0 -1.3   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week resulted in a net position of -53,118 contracts in the data reported through Tuesday. This was a weekly advance of 10,129 contracts from the previous week which had a total of -63,247 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.7 percent. The commercials are Bullish with a score of 71.2 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.4 74.7 7.9 – Percent of Open Interest Shorts: 38.6 44.0 15.4 – Net Position: -53,118 70,230 -17,112 – Gross Longs: 35,184 170,967 18,055 – Gross Shorts: 88,302 100,737 35,167 – Long to Short Ratio: 0.4 to 1 1.7 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 35.7 71.2 20.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 18.8 -14.3 -4.2   Japanese Yen Futures: The Japanese Yen large speculator standing this week resulted in a net position of -52,570 contracts in the data reported through Tuesday. This was a weekly boost of 5,884 contracts from the previous week which had a total of -58,454 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 36.5 percent. The commercials are Bullish with a score of 68.8 percent and the small traders (not shown in chart) are Bearish with a score of 22.3 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.1 71.1 10.5 – Percent of Open Interest Shorts: 41.6 39.4 17.6 – Net Position: -52,570 67,895 -15,325 – Gross Longs: 36,462 152,071 22,379 – Gross Shorts: 89,032 84,176 37,704 – Long to Short Ratio: 0.4 to 1 1.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 36.5 68.8 22.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 30.6 -23.0 -5.2   Swiss Franc Futures: The Swiss Franc large speculator standing this week resulted in a net position of -8,591 contracts in the data reported through Tuesday. This was a weekly reduction of -1,434 contracts from the previous week which had a total of -7,157 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.7 percent. The commercials are Bullish with a score of 72.0 percent and the small traders (not shown in chart) are Bearish with a score of 26.1 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.3 64.8 23.9 – Percent of Open Interest Shorts: 32.7 20.3 47.0 – Net Position: -8,591 17,862 -9,271 – Gross Longs: 4,523 25,994 9,588 – Gross Shorts: 13,114 8,132 18,859 – Long to Short Ratio: 0.3 to 1 3.2 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 34.7 72.0 26.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 20.3 -21.2 18.0   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week resulted in a net position of 9,097 contracts in the data reported through Tuesday. This was a weekly gain of 4,992 contracts from the previous week which had a total of 4,105 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.6 percent. The commercials are Bullish with a score of 58.5 percent and the small traders (not shown in chart) are Bearish with a score of 36.4 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.2 45.9 20.7 – Percent of Open Interest Shorts: 25.8 54.5 18.5 – Net Position: 9,097 -12,247 3,150 – Gross Longs: 45,893 65,407 29,537 – Gross Shorts: 36,796 77,654 26,387 – Long to Short Ratio: 1.2 to 1 0.8 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.6 58.5 36.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 26.5 -20.7 2.5   Australian Dollar Futures: The Australian Dollar large speculator standing this week resulted in a net position of -42,980 contracts in the data reported through Tuesday. This was a weekly decrease of -2,374 contracts from the previous week which had a total of -40,606 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.0 percent. The commercials are Bullish with a score of 54.1 percent and the small traders (not shown in chart) are Bearish with a score of 42.2 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.6 61.7 14.1 – Percent of Open Interest Shorts: 51.4 28.0 17.1 – Net Position: -42,980 47,163 -4,183 – Gross Longs: 28,887 86,347 19,791 – Gross Shorts: 71,867 39,184 23,974 – Long to Short Ratio: 0.4 to 1 2.2 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 45.0 54.1 42.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.5 -5.4 13.7   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week resulted in a net position of -5,311 contracts in the data reported through Tuesday. This was a weekly gain of 112 contracts from the previous week which had a total of -5,423 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.4 percent. The commercials are Bearish with a score of 43.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.4 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.1 64.9 5.6 – Percent of Open Interest Shorts: 42.2 43.7 13.6 – Net Position: -5,311 8,551 -3,240 – Gross Longs: 11,720 26,167 2,256 – Gross Shorts: 17,031 17,616 5,496 – Long to Short Ratio: 0.7 to 1 1.5 to 1 0.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 62.4 43.6 14.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 20.9 -19.8 4.4   Mexican Peso Futures: The Mexican Peso large speculator standing this week resulted in a net position of -13,980 contracts in the data reported through Tuesday. This was a weekly boost of 12,890 contracts from the previous week which had a total of -26,870 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.4 percent. The commercials are Bullish with a score of 76.6 percent and the small traders (not shown in chart) are Bullish with a score of 63.7 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 55.3 40.9 3.6 – Percent of Open Interest Shorts: 62.5 36.1 1.1 – Net Position: -13,980 9,107 4,873 – Gross Longs: 107,031 79,060 7,059 – Gross Shorts: 121,011 69,953 2,186 – Long to Short Ratio: 0.9 to 1 1.1 to 1 3.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 21.4 76.6 63.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.0 17.2 3.6   Brazilian Real Futures: The Brazilian Real large speculator standing this week resulted in a net position of 37,028 contracts in the data reported through Tuesday. This was a weekly lowering of -7,317 contracts from the previous week which had a total of 44,345 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.8 percent. The commercials are Bearish-Extreme with a score of 13.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 82.4 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 71.7 22.8 5.5 – Percent of Open Interest Shorts: 10.1 86.9 3.0 – Net Position: 37,028 -38,531 1,503 – Gross Longs: 43,088 13,691 3,307 – Gross Shorts: 6,060 52,222 1,804 – Long to Short Ratio: 7.1 to 1 0.3 to 1 1.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 86.8 13.7 82.4 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 0.9 1.9   Bitcoin Futures: The Bitcoin large speculator standing this week resulted in a net position of 1,085 contracts in the data reported through Tuesday. This was a weekly gain of 39 contracts from the previous week which had a total of 1,046 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 2.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.8 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 81.3 0.8 6.5 – Percent of Open Interest Shorts: 73.3 7.7 7.5 – Net Position: 1,085 -947 -138 – Gross Longs: 11,137 115 890 – Gross Shorts: 10,052 1,062 1,028 – Long to Short Ratio: 1.1 to 1 0.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 100.0 2.8 9.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.1 -4.2 -4.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
The Swing Overview - Week 26 2022

The Swing Overview - Week 26 2022

Purple Trading Purple Trading 04.07.2022 10:50
The Swing Overview - Week 26 2022 After ashort-term upward correction, the indices resumed their bearish trend and closed the week in the red. Along with this risk-off sentiment, commodity currencies weakened, as did the British pound and the euro. Gold is losing ground as a means of inflation protection and has fallen back below the USD 1,800 per ounce. The US dollar, on the other hand, is still the strongest currency amid the looming recession. Macroeconomic data The number of new home sales in the US for May reached 696,000, beating expectations of 588,000. This is positive news.   On the other hand, the negative news is the drop in consumer confidence, which reached 98.7 for May (103.2 the previous month). The drop in consumer confidence is expected to affect consumer spendings. It is evident that American consumers are reluctant to spend in times of rising prices and are accumulating savings for the future. This is of course contributing to the economic slowdown and the risk of a recession in the US is thus becoming stronger. This was confirmed by the GDP data, which fell for the third month in a row.   The fall in GDP last month was 1.6%. GDP was therefore negative in 1Q 2022. If it is also negative in 2Q2022, it will be an official confirmation of the recession defined by two negative quarters in a row. Jerome Powell suggested this week that the risk of the economy being damaged by higher rates is less important than restoring price stability. This heightens fears that a slowdown in the US economy will take the whole world down with it. So in times when central banks are tackling inflation, this risk will set the tone for some time.    This situation is positive for the US dollar, which is seen by investors as a safe haven asset in times of uncertainty. The dollar therefore remains close to this year's highs.  Although the yield on 10-year US Treasuries has fallen below 3%, the overall trend in bond yields is still upwards. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The strengthening on the SP 500 Index that we have seen in the week of June 20 was really just a short-term correction to the overall downtrend, as we have previously suggested. Last week saw another sell-off and so the overall downtrend on the index continues.   Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the range of 3,810 - 3,820. The next resistance is 3,930 - 3,950. A support is 3 640 - 3 670.    German DAX index  The German Ifo Business Climate Index which measures the expectations of manufacturers, builders and sellers for the next 6 months continued to show a value of 92.3, which is worse than the previous month when the index value was 93.0. The fall in the reading suggests some pessimism, accentuated by current market uncertainties, which include the impact of the war in Ukraine and high inflation, which in Germany for the month of June was 7.6% year-on-year. However, inflation fell by 0.1% month-on-month.   The labour market has also indicated problems. The number of unemployed in Germany rose by 133 000, while the market had expected a fall of 6 000. This was very negative news, which triggered a strong sell-off on the Dax on Thursday. On the other hand, retail sales were positive, rising by 0.6% in May, while a 5.4% decline was recorded in April. Figure 3: German DAX index on H4 and daily chart The DAX has broken support according to the H4 chart at 12,850, which has now become the new resistance, which is in the 12,820 - 12,850 range. The next resistance according to the H4 chart is then at 13,280 - 13,375. The strong support according to the daily chart is 12,443 - 12,620, which price is currently approaching.    Eurozone inflation at a new record Eurozone consumer inflation reached another record high in June, rising by 8.6% year-on-year. This is higher than analysts' expectations, who predicted a rise of 8.4%. Inflation is therefore continuing to rise, so the expectation that the ECB could raise rates by more than 0.25% in July is on target and this could support the euro's growth. On the other hand, there is a strong dollar which could continue to slow down bulls on the euro.   Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.048 - 1.0500. The next resistance is at 1.0600 - 1.0610. Support is at 1.0360 - 1.0380.   Gold broke the $1,800 price tag The development in gold has once again confirmed that investors prefer US bonds instead of gold, which, in addition to being considered a "safe haven" along with the US dollar, also brings a small but still certain return. The strong dollar is not good news for gold, which has fallen below the key support of USD 1,800 per ounce.  Figure 5: Gold on H4 and daily chart The nearest resistance according to the H4 chart is therefore in the zone of USD 1,800 - 1,807 per ounce. Below this resistance we have several supports. The closest one is 1 780 - 1 787 USD per ounce.  
The Swing Overview - Week 26 2022 - 08.07.2022

The Swing Overview - Week 26 2022 - 08.07.2022

Purple Trading Purple Trading 08.07.2022 09:47
The Swing Overview - Week 26 2022 After ashort-term upward correction, the indices resumed their bearish trend and closed the week in the red. Along with this risk-off sentiment, commodity currencies weakened, as did the British pound and the euro. Gold is losing ground as a means of inflation protection and has fallen back below the USD 1,800 per ounce. The US dollar, on the other hand, is still the strongest currency amid the looming recession. Macroeconomic data The number of new home sales in the US for May reached 696,000, beating expectations of 588,000. This is positive news.   On the other hand, the negative news is the drop in consumer confidence, which reached 98.7 for May (103.2 the previous month). The drop in consumer confidence is expected to affect consumer spendings. It is evident that American consumers are reluctant to spend in times of rising prices and are accumulating savings for the future. This is of course contributing to the economic slowdown and the risk of a recession in the US is thus becoming stronger. This was confirmed by the GDP data, which fell for the third month in a row.   The fall in GDP last month was 1.6%. GDP was therefore negative in 1Q 2022. If it is also negative in 2Q2022, it will be an official confirmation of the recession defined by two negative quarters in a row. Jerome Powell suggested this week that the risk of the economy being damaged by higher rates is less important than restoring price stability. This heightens fears that a slowdown in the US economy will take the whole world down with it. So in times when central banks are tackling inflation, this risk will set the tone for some time.    This situation is positive for the US dollar, which is seen by investors as a safe haven asset in times of uncertainty. The dollar therefore remains close to this year's highs.  Although the yield on 10-year US Treasuries has fallen below 3%, the overall trend in bond yields is still upwards. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The strengthening on the SP 500 Index that we have seen in the week of June 20 was really just a short-term correction to the overall downtrend, as we have previously suggested. Last week saw another sell-off and so the overall downtrend on the index continues.   Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the range of 3,810 - 3,820. The next resistance is 3,930 - 3,950. A support is 3 640 - 3 670.    German DAX index  The German Ifo Business Climate Index which measures the expectations of manufacturers, builders and sellers for the next 6 months continued to show a value of 92.3, which is worse than the previous month when the index value was 93.0. The fall in the reading suggests some pessimism, accentuated by current market uncertainties, which include the impact of the war in Ukraine and high inflation, which in Germany for the month of June was 7.6% year-on-year. However, inflation fell by 0.1% month-on-month.   The labour market has also indicated problems. The number of unemployed in Germany rose by 133 000, while the market had expected a fall of 6 000. This was very negative news, which triggered a strong sell-off on the Dax on Thursday. On the other hand, retail sales were positive, rising by 0.6% in May, while a 5.4% decline was recorded in April. Figure 3: German DAX index on H4 and daily chart The DAX has broken support according to the H4 chart at 12,850, which has now become the new resistance, which is in the 12,820 - 12,850 range. The next resistance according to the H4 chart is then at 13,280 - 13,375. The strong support according to the daily chart is 12,443 - 12,620, which price is currently approaching.    Eurozone inflation at a new record Eurozone consumer inflation reached another record high in June, rising by 8.6% year-on-year. This is higher than analysts' expectations, who predicted a rise of 8.4%. Inflation is therefore continuing to rise, so the expectation that the ECB could raise rates by more than 0.25% in July is on target and this could support the euro's growth. On the other hand, there is a strong dollar which could continue to slow down bulls on the euro.   Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.048 - 1.0500. The next resistance is at 1.0600 - 1.0610. Support is at 1.0360 - 1.0380.   Gold broke the $1,800 price tag The development in gold has once again confirmed that investors prefer US bonds instead of gold, which, in addition to being considered a "safe haven" along with the US dollar, also brings a small but still certain return. The strong dollar is not good news for gold, which has fallen below the key support of USD 1,800 per ounce.  Figure 5: Gold on H4 and daily chart The nearest resistance according to the H4 chart is therefore in the zone of USD 1,800 - 1,807 per ounce. Below this resistance we have several supports. The closest one is 1 780 - 1 787 USD per ounce.  
The Swing Overview - Week 27 2022

The Swing Overview - Week 27 2022

Purple Trading Purple Trading 08.07.2022 10:27
The Swing Overview - Week 27 2022 The fall in US bond yields, the rise in the US dollar and the sharp weakening in the euro, which is heading towards parity with the dollar. This is how the last week, in which stock indices cautiously strengthened and made a correction in the downward trend, could be characterised. It is worth noting that Germany has a negative trade balance for the first time since May 1991. Is the country losing its reputation as an economic powerhouse of Europe? Macroeconomic data The ISM in manufacturing, which shows purchasing managers' expectations of economic developments in the short term, came in at 53.0 for June.  While a value above 50 still indicates an expected expansion in the sector, the trend since the beginning of the year has been declining, indicating worsening of optimism.   Unemployment claims reached 231,000 last week. This is still a level that is fairly normal. However, we note that this is the 6th week in a row that the number of claims has been rising. The crucial news on the labour market will then be shown in Friday's NFP data.   On Wednesday, the minutes of the last FOMC meeting were presented, which confirmed that another 50-75 point rate hike is likely in July. The minutes also stated that the Fed could tighten further its hawkish policy if inflationary pressures persist. The Fed's target is to push inflation down to around 2%.   The Fed's hawkish tone has led to a strengthening of the dollar, which has reached a level over 107, its highest level since October 2002. Following the presentation of the FOMC minutes, the US Treasury yields started to rise again. Figure 1: The US 10-year bond yields and the USD index on the daily chart   The SP 500 Index The temporary decline in US Treasury yields was the reason for the correction in the bearish trend in equity indices. However, the bear market still continues to be supported fundamentally by fears of an impending recession.  Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the 3,930 - 3,950 range. A support is at 3,740 - 3,750 and then 3,640 - 3,670.    German DAX index The German manufacturing PMI for June came in at 52.0 (previous month 54.8). The downward trend shows a deterioration in optimism.    It is worth noting that Germany's trade balance is negative for the first time since May 1991, i.e. imports are higher than exports. The current trade balance is - EUR 1 billion. The market was expecting a surplus of 2.7 billion. Rising prices of imported energy and a reduction in exports to Russia have contributed to the negative balance. Figure 3: German DAX index on H4 and daily chart The DAX is in a downtrend. On the H4 chart, it has reached the moving average EMA 50. The resistance is in the range of 12,900 - 12,960. Strong support on the daily chart is 12,443 - 12,500, which was tested again last week.    Euro is near parity with the USD Even high inflation, which is already at 8.6%, has not stopped the euro from falling. It seems that parity with the dollar could be reached very soon. The negative trade balance in Germany has contributed very significantly to the euro's decline.  Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.020 - 1.021. Support according to the daily chart would be only at parity with the dollar at 1.00. Reaching this value would represent a unique situation that has not occurred on the EUR/USD pair since 2002.   Australia raised interest rates The Reserve Bank of Australia raised the interest rate by 0.50% as expected. The current interest rate now stands at 1.35%. According to the central bank, the Australian economy has been solid so far thanks to commodity exports, the prices of which have been rising. Unemployment is 3.9%, the lowest level in 50 years.   One uncertainty is the behaviour of consumers, who are cutting back on spending in times of high inflation. A significant risk is global development, which is influenced by the war in Ukraine and its impact on energy and agricultural commodity prices.   Figure 5: The AUD/USD on H4 and daily chart The AUD/USD is in a downtrend and even the rate hike did not help the Australian dollar to strengthen. However, there has been some correction in the downtrend. The resistance according to the H4 chart is 0.6880 - 0.6900. The support is at 0.6760 - 0.6770.  
COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

Invest Macro Invest Macro 09.07.2022 14:15
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower for a second straight week this week as three out of the eight stock markets we cover had higher positioning this week while five markets had lower contracts. Leading the gains for stock markets was the Nasdaq Mini (6,705 contracts) with the VIX (4,068 contracts) and Dow Jones Industrial Average Mini (1,990 contracts) also showing positive weeks. Meanwhile, leading the decreases in speculator bets this week were the S&P500 Mini (-44,456 contracts) and with MSCI EAFE Mini (-31,197 contracts), Russell 2000 Mini (-13,973 contracts), MSCI Emerging Markets Mini (-4,586 contracts) and the Nikkei 225 USD (-130 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq Mini (92.3 percent) is at the highest level of the stock markets currently followed by the VIX (86.4 percent). Both are in extreme bullish levels compared to the past three years of speculator sentiment. On the lower end, the Russell 2000 Mini (0 percent) and the MSCI EAFE Mini (0 percent) are in bearish-extreme levels and at their lowest level of positioning of the past three years. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the S&P500 Mini (-43.1 percent) and MSCI EAFE Mini (-37.5 percent) are leading the down-trending scores over the past six weeks. The Nasdaq Mini, meanwhile, leads the trends to the upside with a 9.6 percent trend change. Data Snapshot of Stock Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,309,241 8 -183,682 22 221,625 100 -37,943 18 Nikkei 225 14,508 11 -1,745 69 3,210 46 -1,465 10 Nasdaq-Mini 259,449 48 30,895 92 -25,919 11 -4,976 38 DowJones-Mini 67,437 24 -23,083 7 27,554 96 -4,471 15 VIX 266,933 17 -45,501 86 52,406 15 -6,905 58 Nikkei 225 Yen 60,276 44 3,916 46 25,226 88 -29,142 15   VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -45,501 contracts in the data reported through Tuesday. This was a weekly lift of 4,068 contracts from the previous week which had a total of -49,569 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.4 percent. The commercials are Bearish-Extreme with a score of 14.6 percent and the small traders (not shown in chart) are Bullish with a score of 57.9 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.2 54.0 8.8 – Percent of Open Interest Shorts: 34.3 34.4 11.4 – Net Position: -45,501 52,406 -6,905 – Gross Longs: 45,972 144,271 23,601 – Gross Shorts: 91,473 91,865 30,506 – Long to Short Ratio: 0.5 to 1 1.6 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 86.4 14.6 57.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 0.7 2.3   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -183,682 contracts in the data reported through Tuesday. This was a weekly reduction of -44,456 contracts from the previous week which had a total of -139,226 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.2 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.4 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 10.3 77.6 9.9 – Percent of Open Interest Shorts: 18.2 68.0 11.5 – Net Position: -183,682 221,625 -37,943 – Gross Longs: 237,370 1,791,046 227,663 – Gross Shorts: 421,052 1,569,421 265,606 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 22.2 100.0 18.4 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -43.1 42.5 -3.8   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -23,083 contracts in the data reported through Tuesday. This was a weekly advance of 1,990 contracts from the previous week which had a total of -25,073 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.1 percent. The commercials are Bullish-Extreme with a score of 96.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.5 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.4 67.4 15.3 – Percent of Open Interest Shorts: 50.6 26.5 22.0 – Net Position: -23,083 27,554 -4,471 – Gross Longs: 11,053 45,425 10,349 – Gross Shorts: 34,136 17,871 14,820 – Long to Short Ratio: 0.3 to 1 2.5 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 7.1 96.3 14.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.2 1.6 -12.2   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 30,895 contracts in the data reported through Tuesday. This was a weekly increase of 6,705 contracts from the previous week which had a total of 24,190 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 92.3 percent. The commercials are Bearish-Extreme with a score of 10.6 percent and the small traders (not shown in chart) are Bearish with a score of 38.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.2 52.9 13.6 – Percent of Open Interest Shorts: 20.3 62.9 15.6 – Net Position: 30,895 -25,919 -4,976 – Gross Longs: 83,514 137,186 35,380 – Gross Shorts: 52,619 163,105 40,356 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 92.3 10.6 38.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.6 -9.1 -4.8   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -118,593 contracts in the data reported through Tuesday. This was a weekly lowering of -13,973 contracts from the previous week which had a total of -104,620 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.3 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.2 88.2 3.4 – Percent of Open Interest Shorts: 27.4 67.1 4.2 – Net Position: -118,593 123,533 -4,940 – Gross Longs: 42,435 517,591 19,684 – Gross Shorts: 161,028 394,058 24,624 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 12.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -24.8 24.2 -7.5   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,745 contracts in the data reported through Tuesday. This was a weekly fall of -130 contracts from the previous week which had a total of -1,615 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.2 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.9 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.4 55.8 15.5 – Percent of Open Interest Shorts: 40.4 33.7 25.6 – Net Position: -1,745 3,210 -1,465 – Gross Longs: 4,119 8,101 2,250 – Gross Shorts: 5,864 4,891 3,715 – Long to Short Ratio: 0.7 to 1 1.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.2 45.7 9.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.1 0.2 2.3   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of -33,183 contracts in the data reported through Tuesday. This was a weekly decrease of -31,197 contracts from the previous week which had a total of -1,986 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.2 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 90.6 3.8 – Percent of Open Interest Shorts: 12.9 84.8 1.8 – Net Position: -33,183 24,926 8,257 – Gross Longs: 21,492 384,305 15,954 – Gross Shorts: 54,675 359,379 7,697 – Long to Short Ratio: 0.4 to 1 1.1 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 91.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -37.5 33.7 41.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 27 Charts: Energy Speculator bets drop led by WTI Crude Oil & Gasoline

COT Week 27 Charts: Energy Speculator bets drop led by WTI Crude Oil & Gasoline

Invest Macro Invest Macro 09.07.2022 15:11
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Energy market speculator bets were lower this week as just one out of the six energy markets we cover had higher positioning this week while the other five markets had lower contracts. The only market to show speculator bet gains for energy markets was Brent Crude Oil with a gain of +4,163 contracts. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-19,169 contracts) and Gasoline (-4,078 contracts) with Natural Gas (-1,100 contracts), Heating Oil (-1,022 contracts) and the Bloomberg Commodity Index (-137 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Bloomberg Commodity Index (78.8 percent) is above its midpoint for the past 3 years and leads the way for the energy markets in speculator sentiment. Brent oil (46.5 percent) and Heating oil (52 percent) are also positive while WTI Crude (0 percent) and Gasoline (0 percent) are at the bottom of their 3-year ranges and in bearish extreme levels. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Heating oil (18.7 percent) and the Bloomberg Commodity Index (7.8 percent) lead the rising scores over the past six weeks. WTI Crude oil, meanwhile, has been on the largest downtrend with a -17.6 percent score for the past six weeks, followed by Natural Gas (-5.7 percent) and Gasoline (-4.4 percent). Data Snapshot of Commodity Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,637,862 0 280,523 0 -304,217 100 23,694 48 Gold 498,210 13 145,660 0 -165,585 100 19,925 0 Silver 140,463 7 5,139 0 -11,622 100 6,483 0 Copper 183,331 15 -31,796 19 31,340 81 456 28 Palladium 7,373 5 -3,410 4 4,104 98 -694 4 Platinum 72,895 44 -2,734 0 -1,670 100 4,404 23 Natural Gas 977,507 0 -130,519 39 91,950 60 38,569 71 Brent 166,711 13 -38,514 47 37,309 55 1,205 26 Heating Oil 264,269 21 6,486 52 -22,775 47 16,289 55 Soybeans 638,675 7 125,491 52 -93,638 56 -31,853 17 Corn 1,331,035 0 260,705 63 -207,441 42 -53,264 12 Coffee 193,731 1 46,787 79 -49,139 25 2,352 14 Sugar 713,245 0 83,512 54 -85,255 52 1,743 10 Wheat 288,754 0 8,384 30 623 61 -9,007 64   WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week equaled a net position of 280,523 contracts in the data reported through Tuesday. This was a weekly reduction of -19,169 contracts from the previous week which had a total of 299,692 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 48.4 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.1 36.8 5.0 – Percent of Open Interest Shorts: 7.0 55.3 3.5 – Net Position: 280,523 -304,217 23,694 – Gross Longs: 394,943 601,996 81,558 – Gross Shorts: 114,420 906,213 57,864 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 48.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.6 23.1 -22.8   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week equaled a net position of -38,514 contracts in the data reported through Tuesday. This was a weekly lift of 4,163 contracts from the previous week which had a total of -42,677 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.5 percent. The commercials are Bullish with a score of 55.3 percent and the small traders (not shown in chart) are Bearish with a score of 25.5 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.4 52.4 4.1 – Percent of Open Interest Shorts: 38.5 30.0 3.4 – Net Position: -38,514 37,309 1,205 – Gross Longs: 25,605 87,320 6,881 – Gross Shorts: 64,119 50,011 5,676 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 46.5 55.3 25.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.3 -0.3 -8.1   Natural Gas Futures: The Natural Gas Futures large speculator standing this week equaled a net position of -130,519 contracts in the data reported through Tuesday. This was a weekly decline of -1,100 contracts from the previous week which had a total of -129,419 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.4 percent. The commercials are Bullish with a score of 59.9 percent and the small traders (not shown in chart) are Bullish with a score of 71.4 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.2 40.6 6.8 – Percent of Open Interest Shorts: 33.6 31.2 2.8 – Net Position: -130,519 91,950 38,569 – Gross Longs: 197,937 397,060 66,331 – Gross Shorts: 328,456 305,110 27,762 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.4 59.9 71.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.7 8.9 -21.6   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week equaled a net position of 28,021 contracts in the data reported through Tuesday. This was a weekly decrease of -4,078 contracts from the previous week which had a total of 32,099 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 43.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.9 52.7 7.5 – Percent of Open Interest Shorts: 16.6 64.7 5.7 – Net Position: 28,021 -32,693 4,672 – Gross Longs: 72,955 142,761 20,221 – Gross Shorts: 44,934 175,454 15,549 – Long to Short Ratio: 1.6 to 1 0.8 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 43.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -4.4 10.5 -43.3   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week equaled a net position of 6,486 contracts in the data reported through Tuesday. This was a weekly fall of -1,022 contracts from the previous week which had a total of 7,508 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.0 percent. The commercials are Bearish with a score of 47.0 percent and the small traders (not shown in chart) are Bullish with a score of 54.8 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.0 52.7 16.0 – Percent of Open Interest Shorts: 12.5 61.3 9.9 – Net Position: 6,486 -22,775 16,289 – Gross Longs: 39,513 139,296 42,410 – Gross Shorts: 33,027 162,071 26,121 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.0 47.0 54.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 18.7 -12.3 -3.9   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week equaled a net position of -7,486 contracts in the data reported through Tuesday. This was a weekly lowering of -137 contracts from the previous week which had a total of -7,349 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.8 percent. The commercials are Bearish with a score of 21.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.1 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.4 66.8 0.5 – Percent of Open Interest Shorts: 38.4 56.1 0.2 – Net Position: -7,486 7,242 244 – Gross Longs: 18,524 45,230 367 – Gross Shorts: 26,010 37,988 123 – Long to Short Ratio: 0.7 to 1 1.2 to 1 3.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 78.8 21.1 19.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -6.8 -10.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 27 Charts: Soft Commodities Speculators bets go lower led by Corn, Sugar & Cocoa

COT Week 27 Charts: Soft Commodities Speculators bets go lower led by Corn, Sugar & Cocoa

Invest Macro Invest Macro 09.07.2022 16:18
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The soft commodities market speculator bets headed lower this week as just three out of the eleven soft commodities markets we cover had higher positioning this week while the other eight markets had lower speculator contracts. Leading the gains for soft commodities markets was Soybean Meal (2,019 contracts) and Coffee (1,587 contracts) with Wheat (705 contracts) also having a positive week. Meanwhile, leading the declines in speculator bets this week were Corn (-67,397 contracts) and Sugar (-39,197 contracts) with Cocoa (-13,454 contracts), Soybeans (-11,702 contracts), Soybean Oil (-10,237 contracts), Live Cattle (-7,806 contracts), Cotton (-5,845 contracts) and Lean Hogs (-1,080 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that Coffee (79.3 percent) and Soybean Meal (80.9 percent) are leading this week with Soybean Meal just above the bullish extreme level (80 percent). On the lower side, Live Cattle (4.5 percent) and Cocoa (10.7 percent) are the lowest strength scores and are both in bearish extreme levels this week. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows once again this week how much the softs sentiment has cooled off after a scorching start to the year. Lean Hogs (8.6 percent), Coffee (8.4 percent) and Soybean Meal (7.8 percent) are the only markets that have had a gain of strength scores over the past six weeks. On the downside, Soybean Oil (-29.9 percent), Sugar (-25.9 percent) and Wheat (-23.4 percent) are leading the downtrends among the soft commodities markets. Data Snapshot of Commodity Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,637,862 0 280,523 0 -304,217 100 23,694 48 Gold 498,210 13 145,660 0 -165,585 100 19,925 0 Silver 140,463 7 5,139 0 -11,622 100 6,483 0 Copper 183,331 15 -31,796 19 31,340 81 456 28 Palladium 7,373 5 -3,410 4 4,104 98 -694 4 Platinum 72,895 44 -2,734 0 -1,670 100 4,404 23 Natural Gas 977,507 0 -130,519 39 91,950 60 38,569 71 Brent 166,711 13 -38,514 47 37,309 55 1,205 26 Heating Oil 264,269 21 6,486 52 -22,775 47 16,289 55 Soybeans 638,675 7 125,491 52 -93,638 56 -31,853 17 Corn 1,331,035 0 260,705 63 -207,441 42 -53,264 12 Coffee 193,731 1 46,787 79 -49,139 25 2,352 14 Sugar 713,245 0 83,512 54 -85,255 52 1,743 10 Wheat 288,754 0 8,384 30 623 61 -9,007 64   CORN Futures: The CORN large speculator standing this week totaled a net position of 260,705 contracts in the data reported through Tuesday. This was a weekly reduction of -67,397 contracts from the previous week which had a total of 328,102 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 63.3 percent. The commercials are Bearish with a score of 42.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.4 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.7 46.5 9.2 – Percent of Open Interest Shorts: 10.1 62.1 13.2 – Net Position: 260,705 -207,441 -53,264 – Gross Longs: 395,713 618,691 122,652 – Gross Shorts: 135,008 826,132 175,916 – Long to Short Ratio: 2.9 to 1 0.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 63.3 42.4 12.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.4 23.5 1.2   SUGAR Futures: The SUGAR large speculator standing this week totaled a net position of 83,512 contracts in the data reported through Tuesday. This was a weekly decrease of -39,197 contracts from the previous week which had a total of 122,709 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.8 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.0 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.8 50.7 9.1 – Percent of Open Interest Shorts: 15.1 62.7 8.9 – Net Position: 83,512 -85,255 1,743 – Gross Longs: 191,390 361,892 65,138 – Gross Shorts: 107,878 447,147 63,395 – Long to Short Ratio: 1.8 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 53.8 52.0 10.0 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -25.9 32.3 -54.7   COFFEE Futures: The COFFEE large speculator standing this week totaled a net position of 46,787 contracts in the data reported through Tuesday. This was a weekly gain of 1,587 contracts from the previous week which had a total of 45,200 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.3 percent. The commercials are Bearish with a score of 24.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.5 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.4 49.2 4.5 – Percent of Open Interest Shorts: 4.2 74.6 3.3 – Net Position: 46,787 -49,139 2,352 – Gross Longs: 54,965 95,332 8,800 – Gross Shorts: 8,178 144,471 6,448 – Long to Short Ratio: 6.7 to 1 0.7 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 79.3 24.7 13.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.4 -9.7 9.4   SOYBEANS Futures: The SOYBEANS large speculator standing this week totaled a net position of 125,491 contracts in the data reported through Tuesday. This was a weekly reduction of -11,702 contracts from the previous week which had a total of 137,193 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.4 percent. The commercials are Bullish with a score of 55.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.2 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.8 51.8 5.9 – Percent of Open Interest Shorts: 10.2 66.4 10.9 – Net Position: 125,491 -93,638 -31,853 – Gross Longs: 190,571 330,584 37,700 – Gross Shorts: 65,080 424,222 69,553 – Long to Short Ratio: 2.9 to 1 0.8 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.4 55.6 17.2 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.1 19.5 -4.3   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week totaled a net position of 34,681 contracts in the data reported through Tuesday. This was a weekly fall of -10,237 contracts from the previous week which had a total of 44,918 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.0 percent. The commercials are Bullish with a score of 72.5 percent and the small traders (not shown in chart) are Bearish with a score of 28.1 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.8 57.1 7.3 – Percent of Open Interest Shorts: 11.3 67.7 6.2 – Net Position: 34,681 -38,614 3,933 – Gross Longs: 75,794 208,440 26,452 – Gross Shorts: 41,113 247,054 22,519 – Long to Short Ratio: 1.8 to 1 0.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 29.0 72.5 28.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -29.9 36.0 -56.9   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week totaled a net position of 95,944 contracts in the data reported through Tuesday. This was a weekly gain of 2,019 contracts from the previous week which had a total of 93,925 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.9 percent. The commercials are Bearish with a score of 24.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.3 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.3 42.5 10.6 – Percent of Open Interest Shorts: 4.0 71.0 6.3 – Net Position: 95,944 -112,761 16,817 – Gross Longs: 111,776 167,821 41,885 – Gross Shorts: 15,832 280,582 25,068 – Long to Short Ratio: 7.1 to 1 0.6 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 80.9 24.3 21.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -2.3 -49.2   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week totaled a net position of 20,029 contracts in the data reported through Tuesday. This was a weekly decrease of -7,806 contracts from the previous week which had a total of 27,835 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.5 percent. The commercials are Bullish-Extreme with a score of 85.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.7 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 33.8 39.7 11.0 – Percent of Open Interest Shorts: 26.7 47.1 10.8 – Net Position: 20,029 -20,591 562 – Gross Longs: 94,773 111,320 30,936 – Gross Shorts: 74,744 131,911 30,374 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.5 85.1 83.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -3.4 2.1 4.0   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week totaled a net position of 15,207 contracts in the data reported through Tuesday. This was a weekly reduction of -1,080 contracts from the previous week which had a total of 16,287 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.3 percent. The commercials are Bullish-Extreme with a score of 86.1 percent and the small traders (not shown in chart) are Bearish with a score of 49.8 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.1 41.0 9.0 – Percent of Open Interest Shorts: 24.3 44.2 13.7 – Net Position: 15,207 -6,194 -9,013 – Gross Longs: 62,222 79,268 17,491 – Gross Shorts: 47,015 85,462 26,504 – Long to Short Ratio: 1.3 to 1 0.9 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.3 86.1 49.8 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.6 -5.9 -15.0   COTTON Futures: The COTTON large speculator standing this week totaled a net position of 50,545 contracts in the data reported through Tuesday. This was a weekly lowering of -5,845 contracts from the previous week which had a total of 56,390 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.8 percent. The commercials are Bearish with a score of 46.1 percent and the small traders (not shown in chart) are Bearish with a score of 37.6 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 40.7 41.6 7.1 – Percent of Open Interest Shorts: 11.7 72.9 4.8 – Net Position: 50,545 -54,576 4,031 – Gross Longs: 70,871 72,524 12,397 – Gross Shorts: 20,326 127,100 8,366 – Long to Short Ratio: 3.5 to 1 0.6 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 54.8 46.1 37.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.0 17.0 -44.4   COCOA Futures: The COCOA large speculator standing this week totaled a net position of -7,115 contracts in the data reported through Tuesday. This was a weekly decline of -13,454 contracts from the previous week which had a total of 6,339 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.7 percent. The commercials are Bullish-Extreme with a score of 91.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.8 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.9 46.4 4.6 – Percent of Open Interest Shorts: 32.1 44.7 4.0 – Net Position: -7,115 5,287 1,828 – Gross Longs: 94,360 146,524 14,461 – Gross Shorts: 101,475 141,237 12,633 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 10.7 91.0 14.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -15.4 18.3 -31.4   WHEAT Futures: The WHEAT large speculator standing this week totaled a net position of 8,384 contracts in the data reported through Tuesday. This was a weekly rise of 705 contracts from the previous week which had a total of 7,679 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.0 percent. The commercials are Bullish with a score of 60.6 percent and the small traders (not shown in chart) are Bullish with a score of 63.7 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 41.9 9.2 – Percent of Open Interest Shorts: 27.3 41.7 12.4 – Net Position: 8,384 623 -9,007 – Gross Longs: 87,094 121,006 26,674 – Gross Shorts: 78,710 120,383 35,681 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 30.0 60.6 63.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.4 35.5 -36.3   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 27 Charts: Bond Market Speculators bets higher overall led by Ultra US Bonds & 2-Year Bonds

COT Week 27 Charts: Bond Market Speculators bets higher overall led by Ultra US Bonds & 2-Year Bonds

Invest Macro Invest Macro 09.07.2022 16:39
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. COT bonds market speculator bets were mostly higher this week as five out of the eight bond markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for the bond markets was the Ultra US Bond (19,328 contracts) and the 2-Year Bond (15,076 contracts) with the 10-Year Bond (11,180 contracts), the Long US Bond (10,580 contracts) and the Ultra 10-Year (3,338 contracts) also having positive weeks. Meanwhile, leading the declines in speculator bets this week were the Eurodollar (-192,721 contracts) and the 5-Year Bond (-51,789 contracts) with the Fed Funds (-24,396 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Treasury Bond (75.6 percent) is at the highest level of the bonds markets again this week followed by the 2-Year Bond (64.7 percent) and the Ultra US Treasury Bond (55.2 percent). On the lower end, the 3-Month Eurodollars (9.7 percent) is the weakest bond market among the speculators and is in a bearish-extreme level again this week. The Ultra 10-Year Bonds (22.9 percent) comes in as the next weakest speculator strength score at the moment but has been on the rise (see chart below) and has come out of the bearish extreme level of the past few weeks. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the Ultra 10-Year Bonds (19.8 percent), the 3-Month Eurodollars (8.9 percent) and the 10-Year Bonds (8.3 percent) are leading the rising trend scores over the past six weeks. The 5-Year Bonds (-23.5 percent) and the US Treasury Bond (-18.3 percent) leads the trends on the downside while the 2-Year Bonds (-10.5 percent) and the Ultra US Treasury Bond (-4.4 percent) also show negative six-week trends. Data Snapshot of Bond Market Traders | Columns Legend Jul-05-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index Eurodollar 9,569,471 14 -2,349,151 10 2,628,720 88 -279,569 43 FedFunds 1,599,372 47 96,186 51 -88,543 49 -7,643 40 2-Year 2,103,356 14 -87,042 65 171,591 57 -84,549 13 Long T-Bond 1,192,980 47 -27,673 76 22,028 18 5,645 57 10-Year 3,469,680 28 -170,500 47 303,820 58 -133,320 48 5-Year 4,013,995 52 -254,453 39 404,953 63 -150,500 40   3-Month Eurodollars Futures: The 3-Month Eurodollars large speculator standing this week was a net position of -2,349,151 contracts in the data reported through Tuesday. This was a weekly fall of -192,721 contracts from the previous week which had a total of -2,156,430 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 9.7 percent. The commercials are Bullish-Extreme with a score of 88.0 percent and the small traders (not shown in chart) are Bearish with a score of 42.9 percent. 3-Month Eurodollars Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.8 71.0 4.4 – Percent of Open Interest Shorts: 30.4 43.6 7.4 – Net Position: -2,349,151 2,628,720 -279,569 – Gross Longs: 557,177 6,798,600 424,934 – Gross Shorts: 2,906,328 4,169,880 704,503 – Long to Short Ratio: 0.2 to 1 1.6 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 9.7 88.0 42.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 8.9 -10.7 25.4   30-Day Federal Funds Futures: The 30-Day Federal Funds large speculator standing this week was a net position of 96,186 contracts in the data reported through Tuesday. This was a weekly fall of -24,396 contracts from the previous week which had a total of 120,582 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.5 percent. The commercials are Bearish with a score of 49.1 percent and the small traders (not shown in chart) are Bearish with a score of 40.3 percent. 30-Day Federal Funds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 12.6 72.4 2.6 – Percent of Open Interest Shorts: 6.6 77.9 3.0 – Net Position: 96,186 -88,543 -7,643 – Gross Longs: 201,100 1,157,169 40,944 – Gross Shorts: 104,914 1,245,712 48,587 – Long to Short Ratio: 1.9 to 1 0.9 to 1 0.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 51.5 49.1 40.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 6.6 -6.1 -9.3   2-Year Treasury Note Futures: The 2-Year Treasury Note large speculator standing this week was a net position of -87,042 contracts in the data reported through Tuesday. This was a weekly rise of 15,076 contracts from the previous week which had a total of -102,118 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.7 percent. The commercials are Bullish with a score of 57.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.3 percent. 2-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.0 78.2 6.9 – Percent of Open Interest Shorts: 17.1 70.0 10.9 – Net Position: -87,042 171,591 -84,549 – Gross Longs: 273,378 1,643,875 144,139 – Gross Shorts: 360,420 1,472,284 228,688 – Long to Short Ratio: 0.8 to 1 1.1 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 64.7 57.4 13.3 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -10.5 14.2 -5.4   5-Year Treasury Note Futures: The 5-Year Treasury Note large speculator standing this week was a net position of -254,453 contracts in the data reported through Tuesday. This was a weekly reduction of -51,789 contracts from the previous week which had a total of -202,664 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.6 percent. The commercials are Bullish with a score of 62.7 percent and the small traders (not shown in chart) are Bearish with a score of 39.7 percent. 5-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.0 83.9 7.6 – Percent of Open Interest Shorts: 13.3 73.8 11.3 – Net Position: -254,453 404,953 -150,500 – Gross Longs: 280,011 3,368,874 303,153 – Gross Shorts: 534,464 2,963,921 453,653 – Long to Short Ratio: 0.5 to 1 1.1 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 38.6 62.7 39.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -23.5 13.7 5.8   10-Year Treasury Note Futures: The 10-Year Treasury Note large speculator standing this week was a net position of -170,500 contracts in the data reported through Tuesday. This was a weekly increase of 11,180 contracts from the previous week which had a total of -181,680 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.5 percent. The commercials are Bullish with a score of 58.0 percent and the small traders (not shown in chart) are Bearish with a score of 48.0 percent. 10-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 8.6 79.8 9.0 – Percent of Open Interest Shorts: 13.5 71.0 12.8 – Net Position: -170,500 303,820 -133,320 – Gross Longs: 297,724 2,767,198 310,990 – Gross Shorts: 468,224 2,463,378 444,310 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 46.5 58.0 48.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 8.3 -8.7 4.3   Ultra 10-Year Notes Futures: The Ultra 10-Year Notes large speculator standing this week was a net position of -22,742 contracts in the data reported through Tuesday. This was a weekly gain of 3,338 contracts from the previous week which had a total of -26,080 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.9 percent. The commercials are Bullish with a score of 77.8 percent and the small traders (not shown in chart) are Bearish with a score of 42.4 percent. Ultra 10-Year Notes Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.2 82.5 11.7 – Percent of Open Interest Shorts: 7.2 69.9 22.4 – Net Position: -22,742 146,293 -123,551 – Gross Longs: 60,503 959,975 136,617 – Gross Shorts: 83,245 813,682 260,168 – Long to Short Ratio: 0.7 to 1 1.2 to 1 0.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 22.9 77.8 42.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 19.8 -16.8 -6.6   US Treasury Bonds Futures: The US Treasury Bonds large speculator standing this week was a net position of -27,673 contracts in the data reported through Tuesday. This was a weekly advance of 10,580 contracts from the previous week which had a total of -38,253 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 75.6 percent. The commercials are Bearish-Extreme with a score of 18.5 percent and the small traders (not shown in chart) are Bullish with a score of 57.1 percent. US Treasury Bonds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 8.1 77.5 13.9 – Percent of Open Interest Shorts: 10.4 75.7 13.5 – Net Position: -27,673 22,028 5,645 – Gross Longs: 96,356 924,975 166,387 – Gross Shorts: 124,029 902,947 160,742 – Long to Short Ratio: 0.8 to 1 1.0 to 1 1.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 75.6 18.5 57.1 – Strength Index Reading (3 Year Range): Bullish Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -18.3 11.9 18.2   Ultra US Treasury Bonds Futures: The Ultra US Treasury Bonds large speculator standing this week was a net position of -318,655 contracts in the data reported through Tuesday. This was a weekly increase of 19,328 contracts from the previous week which had a total of -337,983 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.2 percent. The commercials are Bullish with a score of 54.9 percent and the small traders (not shown in chart) are Bullish with a score of 51.8 percent. Ultra US Treasury Bonds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.2 84.1 11.5 – Percent of Open Interest Shorts: 29.1 61.8 8.9 – Net Position: -318,655 285,953 32,702 – Gross Longs: 53,639 1,077,401 147,290 – Gross Shorts: 372,294 791,448 114,588 – Long to Short Ratio: 0.1 to 1 1.4 to 1 1.3 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 55.2 54.9 51.8 – Strength Index Reading (3 Year Range): Bullish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.4 -2.1 10.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
US Industry Shows Strength as Inflation Expectations Decline

Precious Metals Speculator bets for Gold, Copper & Silver hit multi-year lows

Invest Macro Invest Macro 09.07.2022 18:04
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. COT Metals market speculator bets were overall lower this week as just one out of the six metals markets we cover had higher positioning this week while the other five markets had lower contracts. The only precious metals market to have higher speculator bets this week was Palladium with a rise of just 415 contracts. Meanwhile, leading the declines in speculator bets this week were Gold (-12,033 contracts) and Silver (-5,752 contracts) with Platinum (-1,428 contracts) and Copper (-1,100 contracts) also having lower bets for the week. Highlights of the Metals data: Gold speculators bets have dropped for the past two straight weeks and for nine out of the past twelve weeks. These declines have taken a total of -108,627 contracts off the Gold bullish position in past twelve weeks Current Gold speculator position has fallen to lowest level since May 28th of 2019, a span of 162 weeks Silver bets have dropped in nine out of the past eleven weeks (for a total decrease of -41,290 contracts) Silver speculator positions have now fallen to the lowest level in 160 weeks, dating back to June 11th of 2019 Copper speculator positions are in bearish territory for an 11th straight week and speculator bets have fallen by a total of -67,938 contracts since April 5th Copper speculator bets have decreased to the lowest level (currently at -31,796 contracts) in the past 120 weeks, dating back to March 17th of 2020 Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the speculator sentiment for all of the precious metals is near or at the bottom of each of their 3-year ranges. The highest strength score currently is for Copper (19.5 percent) which is in an extreme bearish level for the past three years (under 20 percent). All the other markets also are in extreme bearish levels as well with Gold, Silver and Platinum residing at 3-year lows of 0 percent each. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that Gold (-18.3 percent), Silver (-12.3 percent) and Copper (-8.8 percent) are leading the scores to the downside over the past six weeks followed by Platinum (-6.0 percent). Palladium (0.3 percent) is the only precious metals with a positive score although it is barely positive. Data Snapshot of Commodity Market Traders | Columns Legend Jul-05-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index WTI Crude 1,637,862 0 280,523 0 -304,217 100 23,694 48 Gold 498,210 13 145,660 0 -165,585 100 19,925 0 Silver 140,463 7 5,139 0 -11,622 100 6,483 0 Copper 183,331 15 -31,796 19 31,340 81 456 28 Palladium 7,373 5 -3,410 4 4,104 98 -694 4 Platinum 72,895 44 -2,734 0 -1,670 100 4,404 23 Natural Gas 977,507 0 -130,519 39 91,950 60 38,569 71 Brent 166,711 13 -38,514 47 37,309 55 1,205 26 Heating Oil 264,269 21 6,486 52 -22,775 47 16,289 55 Soybeans 638,675 7 125,491 52 -93,638 56 -31,853 17 Corn 1,331,035 0 260,705 63 -207,441 42 -53,264 12 Coffee 193,731 1 46,787 79 -49,139 25 2,352 14 Sugar 713,245 0 83,512 54 -85,255 52 1,743 10 Wheat 288,754 0 8,384 30 623 61 -9,007 64   Gold Comex Futures: The Gold Comex Futures large speculator standing this week totaled a net position of 145,660 contracts in the data reported through Tuesday. This was a weekly decline of -12,033 contracts from the previous week which had a total of 157,693 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.5 percent. Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 53.8 23.7 8.8 – Percent of Open Interest Shorts: 24.5 57.0 4.8 – Net Position: 145,660 -165,585 19,925 – Gross Longs: 267,806 118,289 43,933 – Gross Shorts: 122,146 283,874 24,008 – Long to Short Ratio: 2.2 to 1 0.4 to 1 1.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 0.0 100.0 0.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -18.3 21.1 -29.3   Silver Comex Futures: The Silver Comex Futures large speculator standing this week totaled a net position of 5,139 contracts in the data reported through Tuesday. This was a weekly reduction of -5,752 contracts from the previous week which had a total of 10,891 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 39.0 40.0 16.0 – Percent of Open Interest Shorts: 35.4 48.2 11.4 – Net Position: 5,139 -11,622 6,483 – Gross Longs: 54,841 56,137 22,495 – Gross Shorts: 49,702 67,759 16,012 – Long to Short Ratio: 1.1 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 0.0 100.0 0.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -12.3 13.1 -13.2   Copper Grade #1 Futures: The Copper Grade #1 Futures large speculator standing this week totaled a net position of -31,796 contracts in the data reported through Tuesday. This was a weekly reduction of -1,100 contracts from the previous week which had a total of -30,696 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 19.5 percent. The commercials are Bullish-Extreme with a score of 81.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.9 percent. Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.5 51.7 8.5 – Percent of Open Interest Shorts: 46.8 34.6 8.2 – Net Position: -31,796 31,340 456 – Gross Longs: 54,073 94,749 15,516 – Gross Shorts: 85,869 63,409 15,060 – Long to Short Ratio: 0.6 to 1 1.5 to 1 1.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 19.5 81.0 27.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -8.8 8.3 0.6   Platinum Futures: The Platinum Futures large speculator standing this week totaled a net position of -2,734 contracts in the data reported through Tuesday. This was a weekly reduction of -1,428 contracts from the previous week which had a total of -1,306 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.4 percent. Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 43.8 38.6 11.9 – Percent of Open Interest Shorts: 47.5 40.9 5.9 – Net Position: -2,734 -1,670 4,404 – Gross Longs: 31,920 28,155 8,693 – Gross Shorts: 34,654 29,825 4,289 – Long to Short Ratio: 0.9 to 1 0.9 to 1 2.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 0.0 100.0 23.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -6.0 6.7 -11.1   Palladium Futures: The Palladium Futures large speculator standing this week totaled a net position of -3,410 contracts in the data reported through Tuesday. This was a weekly gain of 415 contracts from the previous week which had a total of -3,825 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.6 percent. The commercials are Bullish-Extreme with a score of 97.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.7 percent. Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.4 73.1 11.2 – Percent of Open Interest Shorts: 61.6 17.4 20.6 – Net Position: -3,410 4,104 -694 – Gross Longs: 1,132 5,389 825 – Gross Shorts: 4,542 1,285 1,519 – Long to Short Ratio: 0.2 to 1 4.2 to 1 0.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 3.6 97.7 3.7 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 0.3 1.7 -21.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ - 14.07.2022

Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ - 14.07.2022

8 eightcap 8 eightcap 14.07.2022 14:45
Join us for the penultimate episode of our Trading Week Ahead Live, in partnership with the ForexAnalytix, as we look to finish off the month strongly and deliver more expert live market analysis. Watch Ryan Littlestone, market expert, Managing Director, and host of the ForexAnalytix ‘The Flow Show’, as he takes you through the news and moves from the Asian and early European sessions, and continues to help you to plan for the upcoming week.  JOIN US THIS WEDNESDAY FOR OUR PENULTIMATE LIVE MARKET UPDATE OF THE MONTH | 20th July 2022! Secure your place to see how an expert prepares for the week’s market activity! Join Ryan as ForexAnalytix’s ‘The Flow Show’ continues to take control of the Eightcap Trade Zone and provide you with his penultimate mid-week Live Market update of the month. Watch his 30-45 minute live stream on Wednesday 13th July at 7.30PM AEDT (10.30AM BST), as he explores the news and moves, seeks trade ideas, and analyses the market progress since Monday’s Trading Week Ahead. Set a Reminder The Eightcap Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and ForexAnalytix this month on the Trade Zone as we explore more of the markets together – Please remember to trade safely! The post Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ appeared first on Eightcap.
Currency Speculators drop Euro bets further into bearish territory as EURUSD nears parity

Currency Speculators drop Euro bets further into bearish territory as EURUSD nears parity

Invest Macro Invest Macro 09.07.2022 19:55
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Currency market speculator bets were lower this week as all of the eleven currency markets we cover had lower positioning on the week. Leading the declines in speculator bets this week were the Brazil real (-20,695 contracts) and the Euro (-6,256 contracts) while the Canadian dollar (-4,804 contracts), Australian dollar (-4,641 contracts), US Dollar Index (-3,978 contracts), British pound sterling (-3,090 contracts), Japanese yen (-1,875 contracts), New Zealand dollar (-1,745 contracts), Swiss franc (-1,544 contracts), Bitcoin (-665 contracts) and the Mexican peso (-438 contracts) all saw lower speculator bets for the week. Highlighting the currency futures data this week was the Euro speculator position that fell deeper into bearish territory and dropped for the fourth time in the past five weeks. The speculator position has now decreased by a whopping -69,124 contracts in just the past five weeks and has brought the overall standing to the lowest level since November 30th of 2021, a span of 31 weeks. The Euro price has been strongly on the defensive against the dollar as the EURUSD currency pair this week hit the lowest level since December 0f 2002. The EURUSD fell to a low under the 1.0200 exchange rate on Friday and sets up what seems to be an inevitable test of parity which would also be the first time that has happened since December of 2002. More COT currency notes: US Dollar Index bets fell for a second straight week and dipped below +40,000 contracts for the first time in four weeks. Despite the 2-week decline, the Dollar Index speculator position remains extremely bullish which has seen increases in speculator bets in ten out of the past fifteen weeks. Overall, the Dollar Index positioning has been in bullish territory for fifty-three straight weeks after turning from bearish to bullish on July 6th of 2021. The Dollar Index price this week continued to climb (up 5 out of 6 weeks) and hit the highest level since October of 2002 at above the 107.75 level. Japanese yen speculator bets fell for the first time in the past eight weeks this week. Yen bets remain bearish but have improved strongly over the past few months going from a total of -110,454 contracts on May 10th to a total of -54,445 contracts this week. Despite, the speculator sentiment improvement, the USDJPY currency pair has remained near the top of its range (and close to 20-year highs) at around the 136.00 exchange rate. Brazilian real speculator bets dropped sharply this week by over -20,000 contracts and fell for the third straight week. These declines have brought the BRL position down to the lowest level in the past twenty-two weeks at just +16,333 contracts. The Brazil real price has been on the defensive in the past month as the BRLUSD currency pair fell to a five month low this week near the 0.1850 exchange rate and dropped under its 200-day moving average for the first time since January. Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Dollar Index (90.4 percent) and Bitcoin (87.9 percent) lead the currencies at the top of their respective ranges and are both in bullish extreme positions. The Brazilian real (66.4 percent) comes in as the next highest currency in strength scores but took a large tumble this week to fall out of a bullish extreme level. On the downside, the Mexican peso at 21.2 percent continues to be at the lowest strength level currently and is followed by the Euro at 29.8 percent and the Swiss franc at 30.8 percent. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the Japanese yen (27.7 percent) leads the past six weeks trends once again this week. The Swiss franc (24.2 percent), New Zealand dollar (20.6 percent) and the Canadian dollar (19.1 percent) round out the top movers in the latest data. The Brazilian real (-22.0 percent) saw a huge decrease in speculator positions this week and leads the downside trend scores currently. The next currencies will lower trend scores were the Mexican peso at -18.9 percent followed by the Euro at -17.1 percent. Data Snapshot of Forex Market Traders | Columns Legend Jul-05-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index USD Index 60,857 91 39,251 90 -41,510 10 2,259 41 EUR 673,772 71 -16,852 30 -8,636 74 25,488 17 GBP 240,926 65 -56,208 34 77,009 75 -20,801 13 JPY 217,672 67 -54,445 35 64,063 67 -9,618 34 CHF 38,504 18 -10,135 31 20,075 75 -9,940 24 CAD 145,372 27 4,293 44 -4,533 65 240 31 AUD 146,950 42 -47,621 41 55,708 60 -8,087 33 NZD 45,403 35 -7,056 59 10,521 47 -3,465 12 MXN 197,463 48 -14,418 21 10,096 77 4,322 61 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 39,470 26 16,333 66 -17,398 34 1,065 77 Bitcoin 13,258 75 420 88 -462 0 42 14   US Dollar Index Futures: The US Dollar Index large speculator standing this week resulted in a net position of 39,251 contracts in the data reported through Tuesday. This was a weekly decline of -3,978 contracts from the previous week which had a total of 43,229 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.4 percent. The commercials are Bearish-Extreme with a score of 9.9 percent and the small traders (not shown in chart) are Bearish with a score of 41.2 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 87.0 3.3 8.2 – Percent of Open Interest Shorts: 22.5 71.5 4.5 – Net Position: 39,251 -41,510 2,259 – Gross Longs: 52,927 2,023 4,993 – Gross Shorts: 13,676 43,533 2,734 – Long to Short Ratio: 3.9 to 1 0.0 to 1 1.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 90.4 9.9 41.2 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 2.0 -1.0 -6.3   Euro Currency Futures: The Euro Currency large speculator standing this week resulted in a net position of -16,852 contracts in the data reported through Tuesday. This was a weekly decline of -6,256 contracts from the previous week which had a total of -10,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.8 percent. The commercials are Bullish with a score of 73.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 16.6 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.3 56.1 12.2 – Percent of Open Interest Shorts: 31.8 57.3 8.5 – Net Position: -16,852 -8,636 25,488 – Gross Longs: 197,138 377,654 82,525 – Gross Shorts: 213,990 386,290 57,037 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 29.8 73.6 16.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -17.1 18.1 -13.5   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week resulted in a net position of -56,208 contracts in the data reported through Tuesday. This was a weekly fall of -3,090 contracts from the previous week which had a total of -53,118 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.5 percent. The commercials are Bullish with a score of 75.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.5 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.4 74.2 7.3 – Percent of Open Interest Shorts: 39.8 42.2 16.0 – Net Position: -56,208 77,009 -20,801 – Gross Longs: 39,618 178,745 17,693 – Gross Shorts: 95,826 101,736 38,494 – Long to Short Ratio: 0.4 to 1 1.8 to 1 0.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 33.5 75.2 12.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 17.4 -11.8 -8.6   Japanese Yen Futures: The Japanese Yen large speculator standing this week resulted in a net position of -54,445 contracts in the data reported through Tuesday. This was a weekly reduction of -1,875 contracts from the previous week which had a total of -52,570 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.3 percent. The commercials are Bullish with a score of 66.9 percent and the small traders (not shown in chart) are Bearish with a score of 33.9 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.8 68.8 11.7 – Percent of Open Interest Shorts: 42.8 39.3 16.1 – Net Position: -54,445 64,063 -9,618 – Gross Longs: 38,660 149,702 25,452 – Gross Shorts: 93,105 85,639 35,070 – Long to Short Ratio: 0.4 to 1 1.7 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 35.3 66.9 33.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 27.7 -20.8 -4.8   Swiss Franc Futures: The Swiss Franc large speculator standing this week resulted in a net position of -10,135 contracts in the data reported through Tuesday. This was a weekly reduction of -1,544 contracts from the previous week which had a total of -8,591 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.8 percent. The commercials are Bullish with a score of 75.5 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 8.4 69.2 22.3 – Percent of Open Interest Shorts: 34.7 17.1 48.2 – Net Position: -10,135 20,075 -9,940 – Gross Longs: 3,218 26,664 8,602 – Gross Shorts: 13,353 6,589 18,542 – Long to Short Ratio: 0.2 to 1 4.0 to 1 0.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 30.8 75.5 23.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 24.2 -18.5 7.0   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week resulted in a net position of 4,293 contracts in the data reported through Tuesday. This was a weekly lowering of -4,804 contracts from the previous week which had a total of 9,097 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.2 percent. The commercials are Bullish with a score of 65.0 percent and the small traders (not shown in chart) are Bearish with a score of 30.6 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.2 46.7 21.0 – Percent of Open Interest Shorts: 28.3 49.8 20.8 – Net Position: 4,293 -4,533 240 – Gross Longs: 45,365 67,829 30,460 – Gross Shorts: 41,072 72,362 30,220 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 44.2 65.0 30.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 19.1 -9.6 -11.1   Australian Dollar Futures: The Australian Dollar large speculator standing this week resulted in a net position of -47,621 contracts in the data reported through Tuesday. This was a weekly decrease of -4,641 contracts from the previous week which had a total of -42,980 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.7 percent. The commercials are Bullish with a score of 60.4 percent and the small traders (not shown in chart) are Bearish with a score of 32.7 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.8 64.8 12.6 – Percent of Open Interest Shorts: 51.2 26.9 18.1 – Net Position: -47,621 55,708 -8,087 – Gross Longs: 27,622 95,252 18,508 – Gross Shorts: 75,243 39,544 26,595 – Long to Short Ratio: 0.4 to 1 2.4 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 40.7 60.4 32.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -2.0 1.8 -0.6   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week resulted in a net position of -7,056 contracts in the data reported through Tuesday. This was a weekly decline of -1,745 contracts from the previous week which had a total of -5,311 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 59.4 percent. The commercials are Bearish with a score of 46.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.8 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.0 63.9 5.9 – Percent of Open Interest Shorts: 45.6 40.8 13.6 – Net Position: -7,056 10,521 -3,465 – Gross Longs: 13,634 29,029 2,689 – Gross Shorts: 20,690 18,508 6,154 – Long to Short Ratio: 0.7 to 1 1.6 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 59.4 46.6 11.8 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 20.6 -18.8 -1.0   Mexican Peso Futures: The Mexican Peso large speculator standing this week resulted in a net position of -14,418 contracts in the data reported through Tuesday. This was a weekly reduction of -438 contracts from the previous week which had a total of -13,980 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.2 percent. The commercials are Bullish with a score of 77.0 percent and the small traders (not shown in chart) are Bullish with a score of 61.3 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 54.3 41.6 3.5 – Percent of Open Interest Shorts: 61.6 36.5 1.3 – Net Position: -14,418 10,096 4,322 – Gross Longs: 107,141 82,106 6,947 – Gross Shorts: 121,559 72,010 2,625 – Long to Short Ratio: 0.9 to 1 1.1 to 1 2.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 21.2 77.0 61.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -18.9 18.5 -1.0   Brazilian Real Futures: The Brazilian Real large speculator standing this week resulted in a net position of 16,333 contracts in the data reported through Tuesday. This was a weekly reduction of -20,695 contracts from the previous week which had a total of 37,028 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.4 percent. The commercials are Bearish with a score of 34.3 percent and the small traders (not shown in chart) are Bullish with a score of 77.2 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 61.5 29.8 7.8 – Percent of Open Interest Shorts: 20.1 73.9 5.1 – Net Position: 16,333 -17,398 1,065 – Gross Longs: 24,261 11,776 3,089 – Gross Shorts: 7,928 29,174 2,024 – Long to Short Ratio: 3.1 to 1 0.4 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 66.4 34.3 77.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -22.0 22.5 -8.5     Bitcoin Futures: The Bitcoin large speculator standing this week resulted in a net position of 420 contracts in the data reported through Tuesday. This was a weekly lowering of -665 contracts from the previous week which had a total of 1,085 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 87.9 percent. The commercials are Bearish with a score of 30.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 80.3 1.2 8.0 – Percent of Open Interest Shorts: 77.1 4.7 7.7 – Net Position: 420 -462 42 – Gross Longs: 10,642 158 1,058 – Gross Shorts: 10,222 620 1,016 – Long to Short Ratio: 1.0 to 1 0.3 to 1 1.0 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 87.9 30.9 13.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.8 20.6 1.7   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Stock Market Speculators bets declined overall led by S&P500-Mini & VIX

COT Week 28 Charts: Stock Market Speculators bets declined overall led by S&P500-Mini & VIX

Invest Macro Invest Macro 16.07.2022 15:25
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT stock market speculator bets were mostly lower this week as three out of the seven stock markets we cover had higher positioning while the other four markets had lower weekly net changes. Leading the gains for stock markets was the MSCI EAFE Mini (11,147 contracts) with the Dow Jones Industrial Average Mini (3,240 contracts) and Russell 2000 Mini (815 contracts) also showing  positive weeks. Meanwhile, leading the declines in speculator bets this week were the S&P500 Mini (-31,846 contracts) and the VIX (-20,866 contracts) with the Nasdaq Mini (-11,479 contracts) and the Nikkei 225 USD (-206 contracts) also registering lower bets on the week.   Data Snapshot of Stock Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,317,580 8 -215,528 16 247,687 100 -32,159 20 Nikkei 225 13,053 7 -1,951 68 3,206 46 -1,255 13 Nasdaq-Mini 254,260 45 19,416 86 -9,589 21 -9,827 28 DowJones-Mini 67,254 24 -19,843 11 25,635 94 -5,792 7 VIX 281,586 21 -66,367 76 73,802 25 -7,435 55 Nikkei 225 Yen 61,838 46 7,547 57 25,338 88 -32,885 7   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq-Mini (85.9 percent) leads the stocks and is currently in a bullish extreme position. The VIX (76.0 percent) and the Nikkei USD (68.2 percent) come in as the next highest stock markets in strength scores. On the downside, the Russell2000-Mini (0.5 percent) comes in at the lowest strength level currently (extreme bearish) and continues to scrape the bottom of its 3-year range. The DowJones-Mini (11.1 percent), EAFE-Mini (12.6 percent) and the S&P500-Mini (16.3 percent) round out the next lowest scores and are also in extreme bearish levels (below 20 percent). Strength Statistics: VIX (76.0 percent) vs VIX previous week (86.4 percent) S&P500-Mini (16.3 percent) vs S&P500-Mini previous week (22.2 percent) DowJones-Mini (11.1 percent) vs DowJones-Mini previous week (7.1 percent) Nasdaq-Mini (85.9 percent) vs Nasdaq-Mini previous week (92.3 percent) Russell2000-Mini (0.5 percent) vs Russell2000-Mini previous week (0.0 percent) Nikkei USD (68.2 percent) vs Nikkei USD previous week (69.2 percent) EAFE-Mini (12.6 percent) vs EAFE-Mini previous week (0.0 percent)   Strength Trends Strength Score Trends (or move index, that calculates the 6-week changes in strength scores) show that the DowJones-Mini (7.8 percent) leads the past six weeks trends for stocks currently. The Nasdaq-Mini (7.7 percent) and the Nikkei USD (5.4 percent) fill out the top movers in the latest trends data. The S&P500-Mini (-44.0 percent) and the Russell 2000-Mini (-22.2 percent) lead the downside trend scores this week followed by the EAFE-Mini (-20.7 percent) which saw an improvement from last week (-37.5 percent). Strength Trend Statistics: VIX (-10.8 percent) vs VIX previous week (-1.0 percent) S&P500-Mini (-44.0 percent) vs S&P500-Mini previous week (-43.1 percent) DowJones-Mini (7.8 percent) vs DowJones-Mini previous week (1.2 percent) Nasdaq-Mini (7.7 percent) vs Nasdaq-Mini previous week (9.6 percent) Russell2000-Mini (-22.2 percent) vs Russell2000-Mini previous week (-24.8 percent) Nikkei USD (5.4 percent) vs Nikkei USD previous week (-1.1 percent) EAFE-Mini (-20.7 percent) vs EAFE-Mini previous week (-37.5 percent) VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -66,367 contracts in the data reported through Tuesday. This was a weekly lowering of -20,866 contracts from the previous week which had a total of -45,501 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.0 percent. The commercials are Bearish with a score of 25.0 percent and the small traders (not shown in chart) are Bullish with a score of 55.3 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.5 59.2 8.2 – Percent of Open Interest Shorts: 38.1 33.0 10.8 – Net Position: -66,367 73,802 -7,435 – Gross Longs: 40,825 166,659 23,039 – Gross Shorts: 107,192 92,857 30,474 – Long to Short Ratio: 0.4 to 1 1.8 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.0 25.0 55.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.8 10.1 4.8   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -215,528 contracts in the data reported through Tuesday. This was a weekly decrease of -31,846 contracts from the previous week which had a total of -183,682 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.3 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.6 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.7 77.8 10.1 – Percent of Open Interest Shorts: 19.0 67.1 11.4 – Net Position: -215,528 247,687 -32,159 – Gross Longs: 224,577 1,802,289 233,148 – Gross Shorts: 440,105 1,554,602 265,307 – Long to Short Ratio: 0.5 to 1 1.2 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 16.3 100.0 19.6 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -44.0 39.8 -1.6   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -19,843 contracts in the data reported through Tuesday. This was a weekly rise of 3,240 contracts from the previous week which had a total of -23,083 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.1 percent. The commercials are Bullish-Extreme with a score of 93.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 7.5 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.3 64.3 14.5 – Percent of Open Interest Shorts: 49.8 26.2 23.1 – Net Position: -19,843 25,635 -5,792 – Gross Longs: 13,674 43,227 9,777 – Gross Shorts: 33,517 17,592 15,569 – Long to Short Ratio: 0.4 to 1 2.5 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 11.1 93.9 7.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -5.1 -11.5   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 19,416 contracts in the data reported through Tuesday. This was a weekly reduction of -11,479 contracts from the previous week which had a total of 30,895 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.9 percent. The commercials are Bearish with a score of 20.6 percent and the small traders (not shown in chart) are Bearish with a score of 28.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 55.4 12.7 – Percent of Open Interest Shorts: 22.6 59.1 16.6 – Net Position: 19,416 -9,589 -9,827 – Gross Longs: 76,972 140,774 32,410 – Gross Shorts: 57,556 150,363 42,237 – Long to Short Ratio: 1.3 to 1 0.9 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 85.9 20.6 28.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.7 -8.3 -0.7   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -117,778 contracts in the data reported through Tuesday. This was a weekly gain of 815 contracts from the previous week which had a total of -118,593 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.5 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 8.4 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 6.9 89.0 3.1 – Percent of Open Interest Shorts: 26.9 67.9 4.2 – Net Position: -117,778 123,998 -6,220 – Gross Longs: 40,461 523,195 18,305 – Gross Shorts: 158,239 399,197 24,525 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.5 100.0 8.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -22.2 22.1 -9.9   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,951 contracts in the data reported through Tuesday. This was a weekly lowering of -206 contracts from the previous week which had a total of -1,745 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.2 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.6 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.9 62.1 14.8 – Percent of Open Interest Shorts: 37.9 37.5 24.4 – Net Position: -1,951 3,206 -1,255 – Gross Longs: 2,991 8,101 1,931 – Gross Shorts: 4,942 4,895 3,186 – Long to Short Ratio: 0.6 to 1 1.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.2 45.7 12.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.4 -2.0 -9.2   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of -22,036 contracts in the data reported through Tuesday. This was a weekly boost of 11,147 contracts from the previous week which had a total of -33,183 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.6 percent. The commercials are Bullish-Extreme with a score of 93.1 percent and the small traders (not shown in chart) are Bearish with a score of 44.2 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.7 91.3 2.4 – Percent of Open Interest Shorts: 10.9 86.8 1.7 – Net Position: -22,036 19,139 2,897 – Gross Longs: 24,616 391,518 10,216 – Gross Shorts: 46,652 372,379 7,319 – Long to Short Ratio: 0.5 to 1 1.1 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 12.6 93.1 44.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.7 23.6 -14.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Energy Speculator bets mixed led by Gasoline & Heating Oil

COT Week 28 Charts: Energy Speculator bets mixed led by Gasoline & Heating Oil

Invest Macro Invest Macro 16.07.2022 15:58
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT energy market speculator bets were mixed this week as three out of the six energy markets we cover had higher positioning while the other three markets saw decreasing net positions for the week. Leading the gains for energy markets was Gasoline (4,721 contracts) with Heating Oil (242 contracts) and Brent Crude Oil (126 contracts) also showing very small positive weeks. Meanwhile, leading the declines in speculator bets this week were WTI Crude Oil (-12,195 contracts) and the Bloomberg Commodity Index (-3,229 contracts) with Natural Gas (-1,084 contracts) also registering lower bets on the week.   Data Snapshot of Commodity Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,612,803 0 268,328 0 -294,526 100 26,198 52 Gold 542,493 26 118,121 0 -137,788 100 19,667 0 Silver 142,259 9 3,204 0 -9,612 100 6,408 0 Copper 172,037 6 -26,295 23 27,061 78 -766 21 Palladium 6,474 1 -2,802 7 3,252 93 -450 18 Platinum 75,615 48 -5,911 0 1,235 100 4,676 27 Natural Gas 969,204 0 -131,603 39 94,195 61 37,408 69 Brent 171,950 17 -38,388 47 36,619 54 1,769 33 Heating Oil 266,330 22 6,728 52 -22,853 47 16,125 54 Soybeans 611,751 1 115,119 49 -87,284 57 -27,835 24 Corn 1,333,199 0 247,156 62 -196,533 44 -50,623 14 Coffee 195,810 2 34,308 68 -35,166 37 858 0 Sugar 701,144 0 105,869 58 -115,779 46 9,910 20 Wheat 288,182 0 4,639 25 5,041 67 -9,680 60   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Bloomberg Commodity Index (66.5 percent) and Heating Oil (52.3 percent) lead the energy markets this week. The Bloomberg Commodity Index has been the strongest strength score in the past few weeks but came down from a 78.8 percent score last week showing a weakening strength compared to the 3-year range. On the downside, WTI Crude Oil (0.0 percent) and Gasoline (4.7 percent) come in as the lowest strength scores currently and are both in bearish extreme levels (near the bottom of their 3-year ranges). Strength Statistics: WTI Crude Oil (0.0 percent) vs WTI Crude Oil previous week (3.8 percent) Brent Crude Oil (46.8 percent) vs Brent Crude Oil previous week (46.5 percent) Natural Gas (39.1 percent) vs Natural Gas previous week (39.4 percent) Gasoline (4.7 percent) vs Gasoline previous week (0.0 percent) Heating Oil (52.3 percent) vs Heating Oil previous week (52.0 percent) Bloomberg Commodity Index (66.5 percent) vs Bloomberg Commodity Index previous week (78.8 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Heating Oil (9.7 percent) leads the past six weeks trends for energy this week. Brent Crude Oil (4.2 percent) is the only positive mover in the latest trends data. WTI Crude Oil (-20.1 percent) leads the downside trend scores currently while the next market with lower trend scores was Natural Gas (-6.4 percent) followed by Gasoline (-1.0 percent). Strength Trend Statistics: WTI Crude Oil (-20.1 percent) vs WTI Crude Oil previous week (-16.9 percent) Brent Crude Oil (4.2 percent) vs Brent Crude Oil previous week (1.3 percent) Natural Gas (-6.4 percent) vs Natural Gas previous week (-5.7 percent) Gasoline (-1.0 percent) vs Gasoline previous week (-4.4 percent) Heating Oil (9.7 percent) vs Heating Oil previous week (18.7 percent) Bloomberg Commodity Index (-0.6 percent) vs Bloomberg Commodity Index previous week (7.8 percent) Individual Markets: WTI Crude Oil Futures: The WTI Crude Oil Futures large speculator standing this week resulted in a net position of 268,328 contracts in the data reported through Tuesday. This was a weekly fall of -12,195 contracts from the previous week which had a total of 280,523 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 51.9 percent. WTI Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.3 36.6 5.1 – Percent of Open Interest Shorts: 6.6 54.9 3.5 – Net Position: 268,328 -294,526 26,198 – Gross Longs: 375,155 590,438 82,523 – Gross Shorts: 106,827 884,964 56,325 – Long to Short Ratio: 3.5 to 1 0.7 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 51.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.1 25.2 -20.6   Brent Crude Oil Futures: The Brent Crude Oil Futures large speculator standing this week resulted in a net position of -38,388 contracts in the data reported through Tuesday. This was a weekly rise of 126 contracts from the previous week which had a total of -38,514 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.8 percent. The commercials are Bullish with a score of 54.2 percent and the small traders (not shown in chart) are Bearish with a score of 33.1 percent. Brent Crude Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.6 52.2 4.1 – Percent of Open Interest Shorts: 38.0 30.9 3.1 – Net Position: -38,388 36,619 1,769 – Gross Longs: 26,868 89,831 7,060 – Gross Shorts: 65,256 53,212 5,291 – Long to Short Ratio: 0.4 to 1 1.7 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 46.8 54.2 33.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 4.2 -3.9 -2.2   Natural Gas Futures: The Natural Gas Futures large speculator standing this week resulted in a net position of -131,603 contracts in the data reported through Tuesday. This was a weekly lowering of -1,084 contracts from the previous week which had a total of -130,519 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.1 percent. The commercials are Bullish with a score of 60.6 percent and the small traders (not shown in chart) are Bullish with a score of 68.7 percent. Natural Gas Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.9 41.2 6.8 – Percent of Open Interest Shorts: 32.5 31.4 2.9 – Net Position: -131,603 94,195 37,408 – Gross Longs: 183,194 398,833 65,940 – Gross Shorts: 314,797 304,638 28,532 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 39.1 60.6 68.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.4 10.9 -31.3   Gasoline Blendstock Futures: The Gasoline Blendstock Futures large speculator standing this week resulted in a net position of 32,742 contracts in the data reported through Tuesday. This was a weekly increase of 4,721 contracts from the previous week which had a total of 28,021 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.7 percent. The commercials are Bullish-Extreme with a score of 94.0 percent and the small traders (not shown in chart) are Bullish with a score of 54.1 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.1 55.1 7.3 – Percent of Open Interest Shorts: 13.4 69.2 5.1 – Net Position: 32,742 -38,954 6,212 – Gross Longs: 69,876 153,217 20,335 – Gross Shorts: 37,134 192,171 14,123 – Long to Short Ratio: 1.9 to 1 0.8 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.7 94.0 54.1 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 6.8 -40.8   #2 Heating Oil NY-Harbor Futures: The #2 Heating Oil NY-Harbor Futures large speculator standing this week resulted in a net position of 6,728 contracts in the data reported through Tuesday. This was a weekly increase of 242 contracts from the previous week which had a total of 6,486 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.3 percent. The commercials are Bearish with a score of 46.9 percent and the small traders (not shown in chart) are Bullish with a score of 54.2 percent. Heating Oil Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.8 52.7 16.1 – Percent of Open Interest Shorts: 11.3 61.3 10.1 – Net Position: 6,728 -22,853 16,125 – Gross Longs: 36,724 140,444 43,002 – Gross Shorts: 29,996 163,297 26,877 – Long to Short Ratio: 1.2 to 1 0.9 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 52.3 46.9 54.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.7 -5.2 -6.0   Bloomberg Commodity Index Futures: The Bloomberg Commodity Index Futures large speculator standing this week resulted in a net position of -10,715 contracts in the data reported through Tuesday. This was a weekly lowering of -3,229 contracts from the previous week which had a total of -7,486 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.5 percent. The commercials are Bearish with a score of 33.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.7 percent. Bloomberg Index Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.4 72.9 0.5 – Percent of Open Interest Shorts: 39.5 57.1 0.2 – Net Position: -10,715 10,480 235 – Gross Longs: 15,577 48,468 360 – Gross Shorts: 26,292 37,988 125 – Long to Short Ratio: 0.6 to 1 1.3 to 1 2.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 66.5 33.6 18.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -0.6 1.7 -12.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Soft Commodities Speculators bets drop lower led by Corn, Coffee & Soybeans

COT Week 28 Charts: Soft Commodities Speculators bets drop lower led by Corn, Coffee & Soybeans

Invest Macro Invest Macro 16.07.2022 16:15
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT soft commodities speculator bets were mostly lower this week as five out of the eleven soft commodities markets we cover had higher positioning while the other six markets had lower net speculator contracts. Leading the gains for soft commodities markets was Sugar (22,357 contracts) and Lean Hogs (9,852 contracts) with Soybean Meal (4,453 contracts), Cocoa (2,935 contracts) and Live Cattle (1,870 contracts) also showing increasing net positions on the week. The markets leading the declines in speculator bets this week were Corn (-13,549 contracts) and Coffee (-12,479 contracts) with Soybeans (-10,372 contracts), Cotton (-7,860 contracts), Soybean Oil (-4,893 contracts) and Wheat (-3,745 contracts) also seeing lower speculator net positions on the week. The latest data for the soft commodities markets (especially strength trends further below) shows how much the softs sentiment has cooled off after a super-hot start to the year.   Data Snapshot of Commodity Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,612,803 0 268,328 0 -294,526 100 26,198 52 Gold 542,493 26 118,121 0 -137,788 100 19,667 0 Silver 142,259 9 3,204 0 -9,612 100 6,408 0 Copper 172,037 6 -26,295 23 27,061 78 -766 21 Palladium 6,474 1 -2,802 7 3,252 93 -450 18 Platinum 75,615 48 -5,911 0 1,235 100 4,676 27 Natural Gas 969,204 0 -131,603 39 94,195 61 37,408 69 Brent 171,950 17 -38,388 47 36,619 54 1,769 33 Heating Oil 266,330 22 6,728 52 -22,853 47 16,125 54 Soybeans 611,751 1 115,119 49 -87,284 57 -27,835 24 Corn 1,333,199 0 247,156 62 -196,533 44 -50,623 14 Coffee 195,810 2 34,308 68 -35,166 37 858 0 Sugar 701,144 0 105,869 58 -115,779 46 9,910 20 Wheat 288,182 0 4,639 25 5,041 67 -9,680 60   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that Soybean Meal (83.4 percent) positions lead the strength scores in the soft commodity markets and are currently in a bullish extreme position. Coffee (68.5 percent) comes in as the next highest soft commodity market in strength scores followed by Corn (61.6 percent) and Sugar (58.4 percent). On the downside, Live Cattle (6.8 percent) and Cocoa (13.5 percent) come in at the lowest strength levels currently and are both in extreme bearish levels. Strength Statistics: Corn (61.6 percent) vs Corn previous week (63.3 percent) Sugar (58.4 percent) vs Sugar previous week (53.8 percent) Coffee (68.5 percent) vs Coffee previous week (79.3 percent) Soybeans (49.2 percent) vs Soybeans previous week (52.4 percent) Soybean Oil (25.8 percent) vs Soybean Oil previous week (29.0 percent) Soybean Meal (83.4 percent) vs Soybean Meal previous week (80.9 percent) Live Cattle (6.8 percent) vs Live Cattle previous week (4.5 percent) Lean Hogs (34.0 percent) vs Lean Hogs previous week (23.3 percent) Cotton (49.8 percent) vs Cotton previous week (54.8 percent) Cocoa (13.5 percent) vs Cocoa previous week (10.7 percent) Wheat (25.1 percent) vs Wheat previous week (30.0 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Lean Hogs (17.3 percent) leads the past six weeks trends for the soft commodity markets this week. Soybean Meal (10.9 percent) and Live Cattle (3.0 percent) round out the only other positive movers in the latest trends data. Soybean Oil (-30.2 percent) and Wheat (-23.0 percent) lead the downside trend scores currently while the next markets with lower trend scores were Soybeans (-21.6 percent) and Corn (-20.1 percent) followed by Sugar (-19.7 percent). Strength Trend Statistics: Corn (-20.1 percent) vs Corn previous week (-21.4 percent) vs Sugar previous week (-25.9 percent) Coffee (-7.5 percent) vs Coffee previous week (8.4 percent) Soybeans (-21.6 percent) vs Soybeans previous week (-19.1 percent) Soybean Oil (-30.2 percent) vs Soybean Oil previous week (-29.9 percent) Soybean Meal (10.9 percent) vs Soybean Meal previous week (7.8 percent) Live Cattle (3.0 percent) vs Live Cattle previous week (-3.4 percent) Lean Hogs (17.3 percent) vs Lean Hogs previous week (8.6 percent) Cotton (-17.9 percent) vs Cotton previous week (-14.0 percent) Cocoa (-14.0 percent) vs Cocoa previous week (-15.4 percent) Wheat (-23.0 percent) vs Wheat previous week (-23.4 percent) Individual Markets: CORN Futures: The CORN large speculator standing this week was a net position of 247,156 contracts in the data reported through Tuesday. This was a weekly decrease of -13,549 contracts from the previous week which had a total of 260,705 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 61.6 percent. The commercials are Bearish with a score of 43.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.9 percent. CORN Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.8 46.8 9.3 – Percent of Open Interest Shorts: 10.3 61.6 13.1 – Net Position: 247,156 -196,533 -50,623 – Gross Longs: 384,324 624,590 123,773 – Gross Shorts: 137,168 821,123 174,396 – Long to Short Ratio: 2.8 to 1 0.8 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 61.6 43.9 13.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.1 22.3 0.1   SUGAR Futures: The SUGAR large speculator standing this week was a net position of 105,869 contracts in the data reported through Tuesday. This was a weekly increase of 22,357 contracts from the previous week which had a total of 83,512 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.4 percent. The commercials are Bearish with a score of 46.2 percent and the small traders (not shown in chart) are Bearish with a score of 20.1 percent. SUGAR Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 26.9 50.5 9.0 – Percent of Open Interest Shorts: 11.8 67.0 7.6 – Net Position: 105,869 -115,779 9,910 – Gross Longs: 188,691 354,173 62,937 – Gross Shorts: 82,822 469,952 53,027 – Long to Short Ratio: 2.3 to 1 0.8 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 58.4 46.2 20.1 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -19.7 23.7 -36.0   COFFEE Futures: The COFFEE large speculator standing this week was a net position of 34,308 contracts in the data reported through Tuesday. This was a weekly decline of -12,479 contracts from the previous week which had a total of 46,787 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.5 percent. The commercials are Bearish with a score of 37.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. COFFEE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.0 52.7 4.4 – Percent of Open Interest Shorts: 7.5 70.6 3.9 – Net Position: 34,308 -35,166 858 – Gross Longs: 49,003 103,113 8,550 – Gross Shorts: 14,695 138,279 7,692 – Long to Short Ratio: 3.3 to 1 0.7 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.5 37.3 0.0 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.5 9.6 -18.6   SOYBEANS Futures: The SOYBEANS large speculator standing this week was a net position of 115,119 contracts in the data reported through Tuesday. This was a weekly lowering of -10,372 contracts from the previous week which had a total of 125,491 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.2 percent. The commercials are Bullish with a score of 57.5 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent. SOYBEANS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.1 51.3 6.3 – Percent of Open Interest Shorts: 9.2 65.6 10.9 – Net Position: 115,119 -87,284 -27,835 – Gross Longs: 171,610 313,986 38,675 – Gross Shorts: 56,491 401,270 66,510 – Long to Short Ratio: 3.0 to 1 0.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.2 57.5 24.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.6 21.3 -0.9   SOYBEAN OIL Futures: The SOYBEAN OIL large speculator standing this week was a net position of 29,788 contracts in the data reported through Tuesday. This was a weekly decrease of -4,893 contracts from the previous week which had a total of 34,681 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 25.8 percent. The commercials are Bullish with a score of 76.3 percent and the small traders (not shown in chart) are Bearish with a score of 22.5 percent. SOYBEAN OIL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.9 59.3 6.9 – Percent of Open Interest Shorts: 10.8 68.0 6.3 – Net Position: 29,788 -32,200 2,412 – Gross Longs: 69,825 219,399 25,642 – Gross Shorts: 40,037 251,599 23,230 – Long to Short Ratio: 1.7 to 1 0.9 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 25.8 76.3 22.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -30.2 36.0 -55.3   SOYBEAN MEAL Futures: The SOYBEAN MEAL large speculator standing this week was a net position of 100,397 contracts in the data reported through Tuesday. This was a weekly lift of 4,453 contracts from the previous week which had a total of 95,944 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 83.4 percent. The commercials are Bearish with a score of 20.7 percent and the small traders (not shown in chart) are Bearish with a score of 34.4 percent. SOYBEAN MEAL Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.9 43.0 10.4 – Percent of Open Interest Shorts: 2.6 73.2 5.5 – Net Position: 100,397 -119,787 19,390 – Gross Longs: 110,774 170,710 41,383 – Gross Shorts: 10,377 290,497 21,993 – Long to Short Ratio: 10.7 to 1 0.6 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 83.4 20.7 34.4 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.9 -5.4 -47.0   LIVE CATTLE Futures: The LIVE CATTLE large speculator standing this week was a net position of 21,899 contracts in the data reported through Tuesday. This was a weekly gain of 1,870 contracts from the previous week which had a total of 20,029 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.8 percent. The commercials are Bullish-Extreme with a score of 82.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.0 percent. LIVE CATTLE Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.3 41.1 11.6 – Percent of Open Interest Shorts: 26.2 49.5 11.3 – Net Position: 21,899 -22,536 637 – Gross Longs: 92,671 111,204 31,321 – Gross Shorts: 70,772 133,740 30,684 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 6.8 82.5 84.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 3.0 -5.4 5.6   LEAN HOGS Futures: The LEAN HOGS large speculator standing this week was a net position of 25,059 contracts in the data reported through Tuesday. This was a weekly rise of 9,852 contracts from the previous week which had a total of 15,207 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.0 percent. The commercials are Bullish with a score of 73.7 percent and the small traders (not shown in chart) are Bullish with a score of 53.3 percent. LEAN HOGS Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.1 39.6 9.8 – Percent of Open Interest Shorts: 21.2 48.2 14.1 – Net Position: 25,059 -16,735 -8,324 – Gross Longs: 66,221 76,851 19,114 – Gross Shorts: 41,162 93,586 27,438 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 34.0 73.7 53.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 17.3 -17.2 -6.8   COTTON Futures: The COTTON large speculator standing this week was a net position of 42,685 contracts in the data reported through Tuesday. This was a weekly decline of -7,860 contracts from the previous week which had a total of 50,545 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.8 percent. The commercials are Bullish with a score of 51.3 percent and the small traders (not shown in chart) are Bearish with a score of 31.4 percent. COTTON Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 38.3 43.5 6.7 – Percent of Open Interest Shorts: 14.1 69.5 5.0 – Net Position: 42,685 -45,740 3,055 – Gross Longs: 67,517 76,796 11,861 – Gross Shorts: 24,832 122,536 8,806 – Long to Short Ratio: 2.7 to 1 0.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.8 51.3 31.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -17.9 20.6 -45.2   COCOA Futures: The COCOA large speculator standing this week was a net position of -4,180 contracts in the data reported through Tuesday. This was a weekly boost of 2,935 contracts from the previous week which had a total of -7,115 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 13.5 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.3 percent. COCOA Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.6 46.2 4.6 – Percent of Open Interest Shorts: 30.9 45.5 3.9 – Net Position: -4,180 2,102 2,078 – Gross Longs: 90,985 141,970 14,013 – Gross Shorts: 95,165 139,868 11,935 – Long to Short Ratio: 1.0 to 1 1.0 to 1 1.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 13.5 87.9 17.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.0 16.0 -21.0   WHEAT Futures: The WHEAT large speculator standing this week was a net position of 4,639 contracts in the data reported through Tuesday. This was a weekly reduction of -3,745 contracts from the previous week which had a total of 8,384 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 25.1 percent. The commercials are Bullish with a score of 66.8 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent. WHEAT Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.2 42.5 9.5 – Percent of Open Interest Shorts: 27.6 40.7 12.9 – Net Position: 4,639 5,041 -9,680 – Gross Longs: 84,206 122,406 27,418 – Gross Shorts: 79,567 117,365 37,098 – Long to Short Ratio: 1.1 to 1 1.0 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 25.1 66.8 60.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.0 33.7 -31.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Bond Market Speculators bets mostly lower led by Eurodollar, 5-Year & FedFunds

COT Week 28 Charts: Bond Market Speculators bets mostly lower led by Eurodollar, 5-Year & FedFunds

Invest Macro Invest Macro 16.07.2022 16:35
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT bond market speculator bets were overall lower this week as just three out of the eight bond markets we cover had higher positioning this week while the other five markets had lower net speculator contracts. Leading the gains for the bond markets was the 10-Year Bond with a gain of 62,129 contracts while the 2-Year Bond (22,473 contracts) and the Long US Treasury Bond (4,455 contracts) also had higher net speculator positions for the week. The Bond markets leading the declines in speculator bets this week were the Eurodollar (-375,415 contracts) and the 5-Year Bond (-36,670 contracts) with the Fed Funds (-15,131 contracts), the Ultra US Bond (-9,640 contracts) and the Ultra 10-Year (-4,597 contracts) also having lower bets on the week. The Eurodollar represents the largest futures market with open interest (contracts open in the market currently) near 10 million contracts each week and the weekly changes dwarf most other markets. Overall, the bonds category represents around sixty percent of the contracts outstanding in the futures markets we cover and currently five bond markets reside in the top six of open interest.   Data Snapshot of Bond Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index Eurodollar 9,649,037 16 -2,724,566 3 3,025,607 95 -301,041 38 FedFunds 1,627,114 49 81,055 50 -72,132 51 -8,923 37 2-Year 2,064,383 12 -64,569 69 166,752 56 -102,183 6 Long T-Bond 1,174,643 43 -23,218 77 8,304 14 14,914 64 10-Year 3,459,761 27 -108,371 56 221,849 48 -113,478 53 5-Year 3,968,034 50 -291,123 32 418,734 64 -127,611 46   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Treasury Bond (77.0 percent) and the 2-Year Bond (69.2 percent) lead the bonds markets currently and have both risen since last week. The 10-Year Bond (56.0 percent) comes in as the next highest bonds market in strength scores and has risen almost 10 percent for the week. On the downside, the Eurodollar (2.8 percent) comes in at the lowest strength level currently and is the only extreme score this week (bearish). The Ultra 10-Year Bond (21.7 percent) and the 5-Year Bond (32.1 percent) follow as the next weakest strength scores. Strength Statistics: Fed Funds (49.6 percent) vs Fed Funds previous week (51.5 percent) 2-Year Bond (69.2 percent) vs 2-Year Bond previous week (64.7 percent) 5-Year Bond (32.1 percent) vs 5-Year Bond previous week (38.6 percent) 10-Year Bond (56.0 percent) vs 10-Year Bond previous week (46.5 percent) Ultra 10-Year Bond (21.7 percent) vs Ultra 10-Year Bond previous week (22.9 percent) US Treasury Bond (77.0 percent) vs US Treasury Bond previous week (75.6 percent) Ultra US Treasury Bond (51.3 percent) vs Ultra US Treasury Bond previous week (55.2 percent) Eurodollar (2.8 percent) vs Eurodollar previous week (9.7 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the Ultra 10-Year Bond leads the past six weeks trends for bonds this week with a 20.3 percent gain. The 10-Year Bond (19.8 percent) and the 2-Year Bond (12.8 percent) round out the next top movers in the latest trends data. The US Treasury Bond (-14.0 percent) leads the downside trend scores currently while the next markets with lower trend scores were the 5-Year Bond (-12.9 percent) followed by the Ultra US Treasury Bond (-7.8 percent). Strength Trend Statistics: Fed Funds (6.9 percent) vs Fed Funds previous week (6.6 percent) 2-Year Bond (12.8 percent) vs 2-Year Bond previous week (-10.5 percent) 5-Year Bond (-12.9 percent) vs 5-Year Bond previous week (-23.5 percent) 10-Year Bond (19.8 percent) vs 10-Year Bond previous week (8.3 percent) Ultra 10-Year Bond (20.3 percent) vs Ultra 10-Year Bond previous week (19.8 percent) US Treasury Bond (-14.0 percent) vs US Treasury Bond previous week (-18.3 percent) Ultra US Treasury Bond (-7.8 percent) vs Ultra US Treasury Bond previous week (-4.4 percent) Eurodollar (2.4 percent) vs Eurodollar (8.9 percent) Individual Markets: 3-Month Eurodollars Futures: The 3-Month Eurodollars large speculator standing this week totaled a net position of -2,724,566 contracts in the data reported through Tuesday. This was a weekly decrease of -375,415 contracts from the previous week which had a total of -2,349,151 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 2.8 percent. The commercials are Bullish-Extreme with a score of 95.1 percent and the small traders (not shown in chart) are Bearish with a score of 38.2 percent. 3-Month Eurodollars Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.7 72.4 4.3 – Percent of Open Interest Shorts: 33.0 41.1 7.4 – Net Position: -2,724,566 3,025,607 -301,041 – Gross Longs: 456,666 6,989,571 415,361 – Gross Shorts: 3,181,232 3,963,964 716,402 – Long to Short Ratio: 0.1 to 1 1.8 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 2.8 95.1 38.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 2.4 -4.2 23.0   30-Day Federal Funds Futures: The 30-Day Federal Funds large speculator standing this week totaled a net position of 81,055 contracts in the data reported through Tuesday. This was a weekly fall of -15,131 contracts from the previous week which had a total of 96,186 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.6 percent. The commercials are Bullish with a score of 51.1 percent and the small traders (not shown in chart) are Bearish with a score of 37.0 percent. 30-Day Federal Funds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.7 72.9 2.3 – Percent of Open Interest Shorts: 6.7 77.3 2.8 – Net Position: 81,055 -72,132 -8,923 – Gross Longs: 189,815 1,186,007 37,102 – Gross Shorts: 108,760 1,258,139 46,025 – Long to Short Ratio: 1.7 to 1 0.9 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 49.6 51.1 37.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.9 -6.7 -2.6   2-Year Treasury Note Futures: The 2-Year Treasury Note large speculator standing this week totaled a net position of -64,569 contracts in the data reported through Tuesday. This was a weekly boost of 22,473 contracts from the previous week which had a total of -87,042 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.2 percent. The commercials are Bullish with a score of 56.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 6.0 percent. 2-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.5 78.0 6.5 – Percent of Open Interest Shorts: 16.6 69.9 11.4 – Net Position: -64,569 166,752 -102,183 – Gross Longs: 278,448 1,610,060 133,635 – Gross Shorts: 343,017 1,443,308 235,818 – Long to Short Ratio: 0.8 to 1 1.1 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.2 56.3 6.0 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 12.8 -5.8 -15.5   5-Year Treasury Note Futures: The 5-Year Treasury Note large speculator standing this week totaled a net position of -291,123 contracts in the data reported through Tuesday. This was a weekly reduction of -36,670 contracts from the previous week which had a total of -254,453 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.1 percent. The commercials are Bullish with a score of 64.4 percent and the small traders (not shown in chart) are Bearish with a score of 45.9 percent. 5-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 6.9 84.2 7.6 – Percent of Open Interest Shorts: 14.3 73.6 10.8 – Net Position: -291,123 418,734 -127,611 – Gross Longs: 274,551 3,340,256 301,482 – Gross Shorts: 565,674 2,921,522 429,093 – Long to Short Ratio: 0.5 to 1 1.1 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 32.1 64.4 45.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -12.9 6.3 6.0   10-Year Treasury Note Futures: The 10-Year Treasury Note large speculator standing this week totaled a net position of -108,371 contracts in the data reported through Tuesday. This was a weekly increase of 62,129 contracts from the previous week which had a total of -170,500 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.0 percent. The commercials are Bearish with a score of 48.2 percent and the small traders (not shown in chart) are Bullish with a score of 52.7 percent. 10-Year Treasury Note Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 10.4 77.6 9.3 – Percent of Open Interest Shorts: 13.5 71.2 12.5 – Net Position: -108,371 221,849 -113,478 – Gross Longs: 360,163 2,686,457 320,087 – Gross Shorts: 468,534 2,464,608 433,565 – Long to Short Ratio: 0.8 to 1 1.1 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 56.0 48.2 52.7 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 19.8 -22.5 13.8   Ultra 10-Year Notes Futures: The Ultra 10-Year Notes large speculator standing this week totaled a net position of -27,339 contracts in the data reported through Tuesday. This was a weekly decrease of -4,597 contracts from the previous week which had a total of -22,742 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.7 percent. The commercials are Bullish with a score of 74.1 percent and the small traders (not shown in chart) are Bullish with a score of 57.2 percent. Ultra 10-Year Notes Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 82.2 12.0 – Percent of Open Interest Shorts: 7.4 71.1 20.8 – Net Position: -27,339 131,498 -104,159 – Gross Longs: 60,265 973,110 141,625 – Gross Shorts: 87,604 841,612 245,784 – Long to Short Ratio: 0.7 to 1 1.2 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 21.7 74.1 57.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 20.3 -20.2 0.7   US Treasury Bonds Futures: The US Treasury Bonds large speculator standing this week totaled a net position of -23,218 contracts in the data reported through Tuesday. This was a weekly lift of 4,455 contracts from the previous week which had a total of -27,673 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.0 percent. The commercials are Bearish-Extreme with a score of 13.6 percent and the small traders (not shown in chart) are Bullish with a score of 64.4 percent. US Treasury Bonds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 8.3 77.2 14.0 – Percent of Open Interest Shorts: 10.3 76.5 12.7 – Net Position: -23,218 8,304 14,914 – Gross Longs: 97,335 907,260 163,928 – Gross Shorts: 120,553 898,956 149,014 – Long to Short Ratio: 0.8 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 77.0 13.6 64.4 – Strength Index Reading (3 Year Range): Bullish Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.0 2.4 28.8   Ultra US Treasury Bonds Futures: The Ultra US Treasury Bonds large speculator standing this week totaled a net position of -328,295 contracts in the data reported through Tuesday. This was a weekly fall of -9,640 contracts from the previous week which had a total of -318,655 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.3 percent. The commercials are Bullish with a score of 61.0 percent and the small traders (not shown in chart) are Bearish with a score of 49.7 percent. Ultra US Treasury Bonds Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.1 84.3 11.4 – Percent of Open Interest Shorts: 29.5 61.2 9.1 – Net Position: -328,295 298,402 29,893 – Gross Longs: 52,766 1,087,219 146,988 – Gross Shorts: 381,061 788,817 117,095 – Long to Short Ratio: 0.1 to 1 1.4 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 51.3 61.0 49.7 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.8 5.3 5.9   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Copper leads Metals Speculators bets while Gold bets fall sharply

COT Week 28 Charts: Copper leads Metals Speculators bets while Gold bets fall sharply

Invest Macro Invest Macro 16.07.2022 17:35
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT precious metals speculator bets were lower again this week as two out of the five metals markets we cover had higher positioning while the other three markets had lower contracts. Leading the gains for the precious metals markets was Copper with a weekly gain of 5,501 contracts while Palladium (608 contracts) also showed a positive week. The metals markets leading the declines in speculator bets this week were Gold (-27,539 contracts) and Platinum (-3,177 contracts) with Silver (-1,935 contracts) also registering lower bets on the week. Highlighting the metals data this week is the continued drop in the Gold speculator positions. Gold speculator bets have fallen for three straight weeks and in ten out of the past thirteen weeks. This amounts to a total decline of -136,166 contracts over that 13-week period. The current bullish standing for Gold has dipped all the way to +118,121 contracts which is a steeply lower compared to the 2022 weekly average of +204,891 contracts. The current speculator standing is at the lowest level in the past one hundred and sixty-three weeks, dating back to May 28th of 2019 when spec bets totaled just +86,688 contracts. Silver contracts have also been in a deep decline as well with speculator bets falling for three straight weeks and for ten out of the past eleven weeks (a total -43,225 contract decline over past 11 weeks). This weakness has brought the overall net position very close to falling into negative or bearish territory at a total of just +3,204 contracts currently. Silver bets, like Gold, are at the lowest level in one hundred and sixty-one weeks, dating back to June 11th of 2019. Data Snapshot of Commodity Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index WTI Crude 1,612,803 0 268,328 0 -294,526 100 26,198 52 Gold 542,493 26 118,121 0 -137,788 100 19,667 0 Silver 142,259 9 3,204 0 -9,612 100 6,408 0 Copper 172,037 6 -26,295 23 27,061 78 -766 21 Palladium 6,474 1 -2,802 7 3,252 93 -450 18 Platinum 75,615 48 -5,911 0 1,235 100 4,676 27 Natural Gas 969,204 0 -131,603 39 94,195 61 37,408 69 Brent 171,950 17 -38,388 47 36,619 54 1,769 33 Heating Oil 266,330 22 6,728 52 -22,853 47 16,125 54 Soybeans 611,751 1 115,119 49 -87,284 57 -27,835 24 Corn 1,333,199 0 247,156 62 -196,533 44 -50,623 14 Coffee 195,810 2 34,308 68 -35,166 37 858 0 Sugar 701,144 0 105,869 58 -115,779 46 9,910 20 Wheat 288,182 0 4,639 25 5,041 67 -9,680 60   Strength Scores Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show the very weak speculator sentiment levels for the precious metals at the moment. Four out of the five metals markets currently have bearish extreme positioning (below 20 percent) as has been the case for many weeks. Copper (23.4 percent) is the only market not in a bearish extreme level currently but remains in the bottom quartile of its 3-year range of speculator positions. Gold, Silver and Platinum are all at zero percent levels which means that speculator bets are at 3-year lows. Strength Statistics: Gold (0.0 percent) vs Gold previous week (11.7 percent) Silver (0.0 percent) vs Silver previous week (2.6 percent) Copper (23.4 percent) vs Copper previous week (19.5 percent) Platinum (0.0 percent) vs Platinum previous week (4.3 percent) Palladium (7.1 percent) vs Palladium previous week (3.6 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the Palladium (1.9 percent) leads the past six weeks trends for metals this week and has the only positive trend among metals. Gold (-23.1 percent), Silver (-14.5 percent) and Platinum (-11.3 percent) lead the downside trend scores currently while Copper (-6.0 percent). Move Statistics: Gold (-23.1 percent) vs Gold previous week (-16.2 percent) Silver (-14.5 percent) vs Silver previous week (-12.0 percent) Copper (-6.0 percent) vs Copper previous week (-8.8 percent) Platinum (-11.3 percent) vs Platinum previous week (-5.7 percent) Palladium (1.9 percent) vs Palladium previous week (0.3 percent) Gold Comex Futures: The Gold Comex Futures large speculator standing this week totaled a net position of 118,121 contracts in the data reported through Tuesday. This was a weekly decrease of -27,539 contracts from the previous week which had a total of 145,660 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 46.3 24.2 9.7 – Percent of Open Interest Shorts: 24.5 49.6 6.1 – Net Position: 118,121 -137,788 19,667 – Gross Longs: 251,126 131,170 52,583 – Gross Shorts: 133,005 268,958 32,916 – Long to Short Ratio: 1.9 to 1 0.5 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 0.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.1 25.1 -27.7   Silver Comex Futures: The Silver Comex Futures large speculator standing this week totaled a net position of 3,204 contracts in the data reported through Tuesday. This was a weekly decrease of -1,935 contracts from the previous week which had a total of 5,139 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent. Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 38.5 40.7 15.3 – Percent of Open Interest Shorts: 36.2 47.4 10.8 – Net Position: 3,204 -9,612 6,408 – Gross Longs: 54,744 57,865 21,748 – Gross Shorts: 51,540 67,477 15,340 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 0.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -14.5 15.6 -16.8   Copper Grade #1 Futures: The Copper Grade #1 Futures large speculator standing this week totaled a net position of -26,295 contracts in the data reported through Tuesday. This was a weekly rise of 5,501 contracts from the previous week which had a total of -31,796 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.4 percent. The commercials are Bullish with a score of 78.1 percent and the small traders (not shown in chart) are Bearish with a score of 20.9 percent. Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.6 50.8 8.1 – Percent of Open Interest Shorts: 45.9 35.1 8.6 – Net Position: -26,295 27,061 -766 – Gross Longs: 52,623 87,389 13,967 – Gross Shorts: 78,918 60,328 14,733 – Long to Short Ratio: 0.7 to 1 1.4 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.4 78.1 20.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -6.0 8.0 -19.5   Platinum Futures: The Platinum Futures large speculator standing this week totaled a net position of -5,911 contracts in the data reported through Tuesday. This was a weekly fall of -3,177 contracts from the previous week which had a total of -2,734 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.2 percent. Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 43.1 39.4 11.2 – Percent of Open Interest Shorts: 50.9 37.7 5.0 – Net Position: -5,911 1,235 4,676 – Gross Longs: 32,580 29,758 8,464 – Gross Shorts: 38,491 28,523 3,788 – Long to Short Ratio: 0.8 to 1 1.0 to 1 2.2 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 27.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -11.3 10.0 7.5   Palladium Futures: The Palladium Futures large speculator standing this week totaled a net position of -2,802 contracts in the data reported through Tuesday. This was a weekly lift of 608 contracts from the previous week which had a total of -3,410 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.1 percent. The commercials are Bullish-Extreme with a score of 93.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.8 percent. Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.5 70.8 13.2 – Percent of Open Interest Shorts: 58.7 20.6 20.1 – Net Position: -2,802 3,252 -450 – Gross Longs: 1,001 4,586 853 – Gross Shorts: 3,803 1,334 1,303 – Long to Short Ratio: 0.3 to 1 3.4 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 7.1 93.0 17.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.9 0.2 -20.9   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Euro, Mexican Peso & Brazilian Real lead Currency Speculators bets lower

Euro, Mexican Peso & Brazilian Real lead Currency Speculators bets lower

Invest Macro Invest Macro 16.07.2022 19:19
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Weekly Speculator Changes COT currency market speculator bets were mostly lower this week as just three out of the eleven currency markets we cover had higher positioning while the other eight markets had lower speculator contracts. Leading the gains for the currency markets was the Australian dollar with a weekly gain of 6,021 contracts while the New Zealand dollar (1,773 contracts) and the Swiss franc (1,411 contracts) also had positive weeks. The currencies leading the declines in speculator bets this week were the Mexican peso (-8,820 contracts) and the Euro (-8,392 contracts) with the Brazilian real (-6,128 contracts), Japanese yen (-5,553 contracts), British pound sterling (-2,881 contracts), US Dollar Index (-897 contracts), Canadian dollar (-788 contracts) and Bitcoin(-591 contracts) also registering lower bets on the week.     Highlighting this week’s COT currency data is the continued decline in the Euro speculator positions which fell for a second straight week and for the fifth time in the past six weeks. Euro bets have now dropped by -77,516 contracts in just the past six weeks, going from +52,272 contracts on May 31st to -25,244 contracts this week. This weakness put the current speculator position at the lowest level since March of 2020 but it is nowhere near the extremely bearish levels of years past (for example: -114,021 contracts in 2020 or -182,845 contracts in 2015). There seems to be a lot of room for the speculator position to fall further. Will this bring the Euro price even lower? That is a fascinating question as the largest currency news story of the past few weeks has been the EURUSD reaching parity for the first time in over twenty years. The EURUSD actually hit 0.9952 on Thursday before closing the week near the 1.0080 exchange rate and with the US Federal Reserve poised to raise interest rates further soon – the EURUSD will likely remain under pressure but how low can it go? The other side of the COT data this week is the continued strength of the US Dollar Index speculator positions. The USD Index speculator bets fell this week for a third straight week but remain very much near their recent highs. Speculative positions recently had three straight weeks of over at least +40,000 net contracts for the first time since 2019 while the speculator position also topped +45,000 contracts (on June 21st) for the first time since March 21st of 2017, a span of 274 weeks. The strong sentiment for the dollar has helped boost the US Dollar Index price to a high over 109.00 this week, reaching the highest level since 2002. With the two largest components of the US Dollar Index, the Euro at 57.6 percent of the index and the Japanese yen at 13.6 percent, so weak at the moment, the DXY might challenge the 110 exchange rate in the weeks to come. Data Snapshot of Forex Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index USD Index 59,565 88 38,354 89 -40,895 11 2,541 44 EUR 682,031 75 -25,244 27 5,760 78 19,484 7 GBP 231,945 59 -59,089 31 75,405 74 -16,316 22 JPY 223,539 71 -59,998 32 75,067 72 -15,069 23 CHF 41,255 23 -8,724 34 19,882 75 -11,158 20 CAD 139,297 23 3,505 43 -4,653 65 1,148 32 AUD 158,263 51 -41,600 46 52,490 58 -10,890 26 NZD 45,837 36 -5,283 62 8,979 44 -3,696 9 MXN 195,611 47 -23,238 17 20,317 81 2,921 55 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 41,034 28 10,205 60 -10,868 41 663 73 Bitcoin 13,505 77 -171 77 -201 0 372 21   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the US Dollar Index (88.9 percent) leads the currency markets near the top of its 3-year range and in a bullish extreme position (above 80 percent). Bitcoin (77.2 percent) comes in as the next highest in the currency markets strength scores with the New Zealand Dollar (62.4 percent) and the Brazilian Real (60.4 percent) rounding out the only other markets above 50 percent or above their midpoint for the past 3 years . On the downside, the Mexican Peso (17.4 percent) comes in at the lowest strength level currently and the only one in a bearish extreme level.  The EuroFX (27.3 percent) continues to fall and is the second lowest strength score this week. Strength Statistics: US Dollar Index (88.9 percent) vs US Dollar Index previous week (90.4 percent) EuroFX (27.3 percent) vs EuroFX previous week (29.8 percent) British Pound Sterling (31.4 percent) vs British Pound Sterling previous week (33.5 percent) Japanese Yen (31.9 percent) vs Japanese Yen previous week (35.3 percent) Swiss Franc (34.4 percent) vs Swiss Franc previous week (30.8 percent) Canadian Dollar (43.3 percent) vs Canadian Dollar previous week (44.2 percent) Australian Dollar (46.3 percent) vs Australian Dollar previous week (40.7 percent) New Zealand Dollar (62.4 percent) vs New Zealand Dollar previous week (59.4 percent) Mexican Peso (17.4 percent) vs Mexican Peso previous week (21.2 percent) Brazil Real (60.4 percent) vs Brazil Real previous week (66.4 percent) Russian Ruble (31.2 percent) vs Russian Ruble previous week (31.9 percent) Bitcoin (77.2 percent) vs Bitcoin previous week (87.9 percent) Strength Trends Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the Swiss Franc (29.7 percent) leads the past six weeks trends for the currency markets this week. The New Zealand Dollar (22.6 percent) and the Japanese Yen (21.2 percent) round out the next highest movers in the latest trends data as the CHF, NZD and the JPY have seen improving sentiment from speculators. The Brazilian Real (-34.5 percent) leads the downside trend scores this week while the next markets with lower trend scores were the Mexican Peso (-25.0 percent) followed by the Euro (-23.8 percent). Strength Trend Statistics: US Dollar Index (1.4 percent) vs US Dollar Index previous week (2.0 percent) EuroFX (-23.8 percent) vs EuroFX previous week (-17.1 percent) British Pound Sterling (10.8 percent) vs British Pound Sterling previous week (17.4 percent) Japanese Yen (21.2 percent) vs Japanese Yen previous week (27.7 percent) Swiss Franc (29.7 percent) vs Swiss Franc previous week (24.2 percent) Canadian Dollar (11.8 percent) vs Canadian Dollar previous week (19.1 percent) Australian Dollar (6.6 percent) vs Australian Dollar previous week (-2.0 percent) New Zealand Dollar (22.6 percent) vs New Zealand Dollar previous week (20.6 percent) Mexican Peso (-25.0 percent) vs Mexican Peso previous week (-18.9 percent) Brazil Real (-34.5 percent) vs Brazil Real previous week (-22.0 percent) Russian Ruble (-15.6 percent) vs Russian Ruble previous week (9.1 percent) Bitcoin (-10.4 percent) vs Bitcoin previous week (-7.8 percent) Individual Markets: US Dollar Index Futures: The US Dollar Index large speculator standing this week totaled a net position of 38,354 contracts in the data reported through Tuesday. This was a weekly fall of -897 contracts from the previous week which had a total of 39,251 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.9 percent. The commercials are Bearish-Extreme with a score of 10.9 percent and the small traders (not shown in chart) are Bearish with a score of 44.3 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 85.8 3.9 9.0 – Percent of Open Interest Shorts: 21.4 72.5 4.7 – Net Position: 38,354 -40,895 2,541 – Gross Longs: 51,109 2,305 5,365 – Gross Shorts: 12,755 43,200 2,824 – Long to Short Ratio: 4.0 to 1 0.1 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 88.9 10.9 44.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.4 0.7 -13.7   Euro Currency Futures: The Euro Currency large speculator standing this week totaled a net position of -25,244 contracts in the data reported through Tuesday. This was a weekly reduction of -8,392 contracts from the previous week which had a total of -16,852 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.3 percent. The commercials are Bullish with a score of 77.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 6.7 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.9 56.5 12.2 – Percent of Open Interest Shorts: 32.6 55.6 9.4 – Net Position: -25,244 5,760 19,484 – Gross Longs: 197,240 385,039 83,394 – Gross Shorts: 222,484 379,279 63,910 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 27.3 77.7 6.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.8 25.8 -22.2   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week totaled a net position of -59,089 contracts in the data reported through Tuesday. This was a weekly reduction of -2,881 contracts from the previous week which had a total of -56,208 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.4 percent. The commercials are Bullish with a score of 74.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.8 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.6 75.3 8.2 – Percent of Open Interest Shorts: 40.1 42.8 15.2 – Net Position: -59,089 75,405 -16,316 – Gross Longs: 33,850 174,748 18,999 – Gross Shorts: 92,939 99,343 35,315 – Long to Short Ratio: 0.4 to 1 1.8 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 31.4 74.3 21.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.8 -7.0 -6.7   Japanese Yen Futures: The Japanese Yen large speculator standing this week totaled a net position of -59,998 contracts in the data reported through Tuesday. This was a weekly decline of -5,553 contracts from the previous week which had a total of -54,445 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.9 percent. The commercials are Bullish with a score of 72.3 percent and the small traders (not shown in chart) are Bearish with a score of 22.8 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 15.9 71.8 10.4 – Percent of Open Interest Shorts: 42.7 38.3 17.1 – Net Position: -59,998 75,067 -15,069 – Gross Longs: 35,533 160,589 23,147 – Gross Shorts: 95,531 85,522 38,216 – Long to Short Ratio: 0.4 to 1 1.9 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 31.9 72.3 22.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 21.2 -14.6 -9.1   Swiss Franc Futures: The Swiss Franc large speculator standing this week totaled a net position of -8,724 contracts in the data reported through Tuesday. This was a weekly rise of 1,411 contracts from the previous week which had a total of -10,135 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.4 percent. The commercials are Bullish with a score of 75.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.8 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.0 63.5 19.4 – Percent of Open Interest Shorts: 38.2 15.4 46.4 – Net Position: -8,724 19,882 -11,158 – Gross Longs: 7,017 26,217 7,984 – Gross Shorts: 15,741 6,335 19,142 – Long to Short Ratio: 0.4 to 1 4.1 to 1 0.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 34.4 75.2 19.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 29.7 -15.9 -6.0   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week totaled a net position of 3,505 contracts in the data reported through Tuesday. This was a weekly decrease of -788 contracts from the previous week which had a total of 4,293 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.3 percent. The commercials are Bullish with a score of 64.9 percent and the small traders (not shown in chart) are Bearish with a score of 32.4 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.9 46.4 22.9 – Percent of Open Interest Shorts: 27.4 49.8 22.0 – Net Position: 3,505 -4,653 1,148 – Gross Longs: 41,613 64,673 31,834 – Gross Shorts: 38,108 69,326 30,686 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 43.3 64.9 32.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.8 -3.6 -12.4   Australian Dollar Futures: The Australian Dollar large speculator standing this week totaled a net position of -41,600 contracts in the data reported through Tuesday. This was a weekly gain of 6,021 contracts from the previous week which had a total of -47,621 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.3 percent. The commercials are Bullish with a score of 58.0 percent and the small traders (not shown in chart) are Bearish with a score of 25.9 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 19.3 67.0 10.5 – Percent of Open Interest Shorts: 45.6 33.9 17.4 – Net Position: -41,600 52,490 -10,890 – Gross Longs: 30,527 106,112 16,570 – Gross Shorts: 72,127 53,622 27,460 – Long to Short Ratio: 0.4 to 1 2.0 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 46.3 58.0 25.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.6 1.0 -20.6   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week totaled a net position of -5,283 contracts in the data reported through Tuesday. This was a weekly gain of 1,773 contracts from the previous week which had a total of -7,056 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.4 percent. The commercials are Bearish with a score of 44.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.2 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.6 61.7 5.3 – Percent of Open Interest Shorts: 44.1 42.1 13.4 – Net Position: -5,283 8,979 -3,696 – Gross Longs: 14,926 28,261 2,436 – Gross Shorts: 20,209 19,282 6,132 – Long to Short Ratio: 0.7 to 1 1.5 to 1 0.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 62.4 44.2 9.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 22.6 -19.1 -12.0   Mexican Peso Futures: The Mexican Peso large speculator standing this week totaled a net position of -23,238 contracts in the data reported through Tuesday. This was a weekly lowering of -8,820 contracts from the previous week which had a total of -14,418 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 17.4 percent. The commercials are Bullish-Extreme with a score of 81.3 percent and the small traders (not shown in chart) are Bullish with a score of 55.4 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 53.5 43.1 3.1 – Percent of Open Interest Shorts: 65.4 32.7 1.6 – Net Position: -23,238 20,317 2,921 – Gross Longs: 104,715 84,247 6,023 – Gross Shorts: 127,953 63,930 3,102 – Long to Short Ratio: 0.8 to 1 1.3 to 1 1.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 17.4 81.3 55.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -25.0 25.2 -7.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week totaled a net position of 10,205 contracts in the data reported through Tuesday. This was a weekly decline of -6,128 contracts from the previous week which had a total of 16,333 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 60.4 percent. The commercials are Bearish with a score of 40.7 percent and the small traders (not shown in chart) are Bullish with a score of 72.5 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 46.8 46.0 7.2 – Percent of Open Interest Shorts: 21.9 72.5 5.6 – Net Position: 10,205 -10,868 663 – Gross Longs: 19,197 18,878 2,957 – Gross Shorts: 8,992 29,746 2,294 – Long to Short Ratio: 2.1 to 1 0.6 to 1 1.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 60.4 40.7 72.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -34.5 35.9 -19.8   Bitcoin Futures: The Bitcoin large speculator standing this week totaled a net position of -171 contracts in the data reported through Tuesday. This was a weekly decline of -591 contracts from the previous week which had a total of 420 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.2 percent. The commercials are Bearish with a score of 46.1 percent and the small traders (not shown in chart) are Bearish with a score of 21.4 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 76.5 1.6 9.2 – Percent of Open Interest Shorts: 77.7 3.1 6.5 – Net Position: -171 -201 372 – Gross Longs: 10,325 216 1,247 – Gross Shorts: 10,496 417 875 – Long to Short Ratio: 1.0 to 1 0.5 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 77.2 46.1 21.4 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.4 17.5 6.2   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
What Does Inflation Rates We Got To Know Mean To Central Banks?

What Does Inflation Rates We Got To Know Mean To Central Banks?

Purple Trading Purple Trading 15.07.2022 13:36
The Swing Overview – Week 28 2022 This week's new record inflation readings sent a clear message to central bankers. Further interest rate hikes must be faster than before. The first of the big banks to take this challenge seriously was the Bank of Canada, which literally shocked the markets with an unprecedented rate hike of a full 1%. This is obviously not good for stocks, which weakened again in the past week. The euro also stumbled and has already fallen below parity with the usd. Uncertainty, on the other hand, favours the US dollar, which has reached new record highs.   Macroeconomic data The data from the US labour market, the so-called NFP, beat expectations, as the US economy created 372 thousand new jobs in June (the expectation was 268 thousand) and the unemployment rate remained at 3.6%. But on the other hand, unemployment claims continued to rise, reaching 244k last week, the 7th week in a row of increase.   But the crucial news was the inflation data for June. It exceeded expectations and reached a new record of 9.1% on year-on-year basis, the highest value since 1981. Inflation rose by 1.3% on month-on-month basis. Energy prices, which rose by 41.6%, had a major impact on inflation. Declines in commodity prices, such as oil, have not yet influenced June inflation, which may be some positive news. Core inflation excluding food and energy prices rose by 5.9%, down from 6% in May.   The value of inflation was a shock to the markets and the dollar strengthened sharply. We can see this in the dollar index, which has already surpassed 109. We will see how the Fed, which will be deciding on interest rates in less than two weeks, will react to this development. A rate hike of 0.75% is very likely and the question is whether even such an increase will be enough for the markets. Meanwhile, there has been an inversion on the yield curve on US bonds. This means that yields on 2-year bonds are higher than those on 10-year bonds. This is one of the signals of a recession. Figure 1: The US Treasury yield curve on the monthly chart and the USD index on the daily chart   The SP 500 Index Apart from macroeconomic indicators, the ongoing earnings season will also influence the performance of the indices this month. Among the major banks, JP Morgan and Morgan Stanley reported results this week. Both banks reported earnings, but they were below investor expectations. The impact of more expensive funding sources that banks need to finance their activities is probably starting to show.   We must also be interested in the data in China, which, due to the size of the Chinese economy, has an impact on the movement of global indices. 2Q GDP in China was 0.4% on year-on-year basis, a significant drop from the previous quarter (4.8%). Strict lockdowns against new COVID-19 outbreaks had an impact on economic situation in the country. Figure 2: SP 500 on H4 and D1 chart The threat of a recession is seeping into the SP 500 index with another decline, which stalled last week at the support level, which according to the H4 is in the 3,740-3,750 range. The next support is 3,640 - 3,670.  The nearest resistance is 3,930 - 3,950. German DAX index The German ZEW sentiment, which shows expectations for the next 6 months, reached - 53.8. This is the lowest reading since 2011. Inflation in Germany reached 7.6% in June. This is lower than the previous month when inflation was 7.9%. Concerns about the global recession continue to affect the DAX index, which has tested significant supports. Figure 3: German DAX index on H4 and daily chart Strong support according to the daily chart is 12,443 - 12,500, which was tested again last week. We can take the moving averages EMA 50 and SMA 100 as a resistance. The nearest horizontal resistance is 12,950 - 13,000.   The euro broke parity with the dollar The euro fell below 1.00 on the pair with the dollar for the first time in 20 years, reaching a low of 0.9950 last week. Although the euro eventually closed above parity, so from a technical perspective it is not a valid break yet, the euro's weakening points to the headwinds the eurozone is facing: high inflation, weak growth, the threat in energy commodity supplies, the war in Ukraine. Figure 4: EUR/USD on H4 and daily chart Next week the ECB will be deciding on interest rates and it is obvious that there will be some rate hike. A modest increase of 0.25% has been announced. Taking into account the issues mentioned above, the motivation for the ECB to raise rates by a more significant step will not be very strong. The euro therefore remains under pressure and it is not impossible that a fall below parity will occur again in the near future.   The nearest resistance according to the H4 chart is at 1.008 - 1.012. A support is the last low, which is at 0.9950 - 0.9960.   Bank of Canada has pulled out the anti-inflation bazooka Analysts had expected the Bank of Canada to raise rates by 0.75%. Instead, the central bank shocked markets with an unprecedented increase by a full 1%, the highest rate hike in 24 years. The central bank did so in response to inflation, which is the highest in Canada in 40 years. With this jump in rates, the bank is trying to prevent uncontrolled price increases.   The reaction of the Canadian dollar has been interesting. It strengthened significantly immediately after the announcement. However, then it began to weaken sharply. This may be because investors now expect the US Fed to resort to a similarly sharp rate hike. Figure 5: USD/CAD on H4 and daily chart Another reason may be the decline in oil prices, which the Canadian dollar is correlated with, as Canada is a major oil producer. The oil is weakening due to fears of a drop in demand that would accompany an economic recession. Figure 6: Oil on the H4 and daily charts Oil is currently in a downtrend. However, it has reached a support value, which is in the area near $94 per barrel. The support has already been broken, but on the daily chart oil closed above this value. Therefore, it is not a valid break yet.  
Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ - 18.07.2022

Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ - 18.07.2022

8 eightcap 8 eightcap 17.07.2022 14:45
Join us for the penultimate episode of our Trading Week Ahead Live, in partnership with the ForexAnalytix, as we look to finish off the month strongly and deliver more expert live market analysis. Watch Ryan Littlestone, market expert, Managing Director, and host of the ForexAnalytix ‘The Flow Show’, as he takes you through the news and moves from the Asian and early European sessions, and continues to help you to plan for the upcoming week.  JOIN US THIS WEDNESDAY FOR OUR PENULTIMATE LIVE MARKET UPDATE OF THE MONTH | 20th July 2022! Secure your place to see how an expert prepares for the week’s market activity! Join Ryan as ForexAnalytix’s ‘The Flow Show’ continues to take control of the Eightcap Trade Zone and provide you with his penultimate mid-week Live Market update of the month. Watch his 30-45 minute live stream on Wednesday 13th July at 7.30PM AEDT (10.30AM BST), as he explores the news and moves, seeks trade ideas, and analyses the market progress since Monday’s Trading Week Ahead. Set a Reminder The Eightcap Trade Zone is the perfect place to get the help and support you need to improve your skills and understanding of the financial markets. So come join Eightcap and ForexAnalytix this month on the Trade Zone as we explore more of the markets together – Please remember to trade safely! The post Trading Week Ahead Live in Partnership with ForexAnalytix ‘The Flow Show’ appeared first on Eightcap.
Which stock market sector is currently interesting due to its volatility?

Which stock market sector is currently interesting due to its volatility?

Purple Trading Purple Trading 18.07.2022 07:57
Which stock market sector is currently interesting due to its volatility While long-term investors in physical shares are not too interested in volatility, CFD traders can make potentially very nice profits from it. However, equity markets are vast and it can happen that an interesting title slips through one’s fingers. This article will make sure that it doesn't happen. What is volatility and how is it created If you were to equate the words volatility and nervousness (or moodiness) you would not be far off the mark. Indeed, volatility is really a measure of nervousness in the markets and where there is nervousness, there is also uncertainty. Uncertainty in the markets can arise for many different reasons, but it usually happens before the release of important macroeconomic news (on our economic calendar), you can identify those by the three bulls' heads symbols) or during unexpected events with a major impact on a particular market sector or the geopolitical order of the world (natural disasters, wars).   On the charts of trading platforms, you can recognize a highly volatile market by the dynamically changing price of the instrument, the market is said to be going up or down, and if you switch to a candle chart, you may notice large candles. Conversely, non-volatile, calm markets move sideways without any significant dips or rises. Volatility can also be historical or implied, but we'll write about that another time. Now, let’s talk about how can one potentially profit from volatility and where to find suitable markets to do so.   How to potentially profit from volatility For intraday and swing traders, volatility is the key to their potential success. For traders, often the worst situation is the so-called "sideways" market movement, where the asset in question goes "sideways" without significant movements either up or down. With small and larger price fluctuations, traders can potentially generate interesting profits. One of the most volatile markets is the stock market, where some news can trigger very significant price movements. Events such as important economic reports, a stock split, or an acquisition announcement, for example, can move the price of a given stock. In addition, traders using CFDs for share trading can also use leverage to multiply any gains (and losses) in a given volatility.   The key to potential success is choosing the right stock titles. Some stocks and sectors can be considered more volatile, while others can go longer periods of time without significant fluctuations. So how do you look for volatility? Several indicators measure price movements in stocks, perhaps the most well-known is beta, which measures the volatility of a given stock compared to a benchmark stock index (typically the S&P 500 for US stocks). The beta indicator is listed on most well-known stock sites, but we can calculate it using the following formula: Beta = 1 In this case, the stock is highly correlated with the market and we can expect very similar movements to the benchmark index.   Beta < 1 If the beta is less than 1, we can consider the stock to be potentially less volatile than the stock market.   Beta > 1 Stocks with a beta greater than 1 are theoretically more volatile than the benchmark index. So, for example, if a stock's beta is 1.1, we think of it as 10% more volatile. It is stock titles with a beta above 1 that should be of most interest to investors looking to take advantage of volatility. However, it is not enough to monitor the beta alone, traders should not forget to monitor important news and fundamentals related to the company and the market in general. Thus, it is advisable to choose a few companies whose stocks have been significantly volatile in the past and where we expect strong movements due to positive and negative news to continue. So which sectors may be worth following? In which sectors can you potentially benefit from high volatility? Energy sector The energy companies sector has historically been one of the most volatile, as confirmed by the course of 2022 so far. The price development of energy companies is of course strongly linked to the price of energy commodities. These have had a great year - both natural gas and oil have appreciated by several tens of percent since the beginning of the year. However, this growth has not been without significant fluctuations, often by higher units of percent per day. The current geopolitical situation and growing talk of recession promise to continue the volatility in the sector. In the chart below, you can see the movement of Exxon Mobil Corp shares in recent weeks. Chart 1: Exxon Mobil shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Travel industry Shares of companies related to the travel industry have always been very volatile. According to data from the beginning of the year (NYU Stern), even the companies classified as hotels and casinos were the most volatile when measured by beta. Given the coronavirus pandemic, this is not surprising. However, the threat of coronavirus still persists and there is currently the talk of another wave. However, global demand for travel is once again strong. Airlines and hotels are beginning to recover from the previous two dry years. As a result, both positive and negative news promises potential volatility going forward. In the chart below, you can see the movement of Hilton Hotels Corp shares in recent weeks. Chart 2: Hilton Hotels shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Technology Technology is a very broad term - some companies in a given sector can be considered "blue chip" stocks, which can generally be less volatile and have the potential to appreciate nicely over time. These include Apple or Microsoft, for example. However, even these will not escape relatively high volatility in 2022. Traders looking for even stronger moves, however, will be more interested in smaller companies such as Uber, Zoom Technologies, Palantir, or PayPal. In the chart below, we can see the evolution of Twitter stock, which has undergone significant volatility in recent weeks. This was linked to the announcement of the acquisition (April gap) and its recent recall by Elon Musk. With both opposing parties facing a court battle, similarly wild news is just more water on the volatility mill. Chart 3: Twitter shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages There are, of course, more sectors that are significantly volatile. Traders can follow companies in the healthcare sector, for example, where coronavirus vaccine companies are among the most interesting ones. Restaurants or aerospace and chemical companies can also be worth looking at. But few things can move stock markets as significantly as the economic cycle. We'll look at the impact of expansion and recession on stocks in our next article.  
AUD/USD Analysis: Identifying Opportunities for Long Positions

Retail Sales Are Projected To Increase In Singapore

TeleTrade Comments TeleTrade Comments 07.10.2022 12:15
Senior Economist at UOB Group Alvin Liew reviews the latest Retail Sales release in Singapore. Key Takeaways “Even as Singapore’s retail sales declined by -1.3% m/m in Aug (from 0.7% in Jul), that still translated to a 13.0% y/y expansion for Aug (from 13.9% in Jul), the fifth consecutive month of double-digit growth. Excluding motor vehicle sales, the m/m decrease was more pronounced at -1.8%, (from 0.6% in Jul), translating to a +16.2% y/y increase (from 18.4% y/y in Jul).” “While the growth fell short of forecast, Aug retail sales growth still added to a solid foundation for domestic demand in 3Q22. While we note that most of the main segments recorded m/m declines in Aug, that could likely be some element of normalisation after the strong post-reopening in Apr (2022) surge from pent-up demand. According to the Department of Statistics Singapore, the y/y increase was attributed to y/y increases recorded in most of the key segments of retail sales.” “Year-to-date, retail sales grew by 11.2% y/y. We believe domestic retailers will likely see continued domestic and external support, complemented by the return of major events such as the F1 night race, various concerts and BTMICE activities (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) attracting tourist arrivals, while the tightening domestic labour market will also contribute to domestic consumption demand. The low base effect is likely to continue to uplift retail sales growth prints in the coming months. Barring the re-emergence of fresh COVID-19 or other health-related risks in Singapore and around the region (leading to re-imposition of social and travel restrictions, which is not our base case), we project retail sales to expand by 8.5% in 2022 (implying a more conservative forecast of around 4% growth in the remaining months of 2022).”
Rates on the Move: Dollar Rates Set to Rise, Sterling Rates Poised to Fall - US Labour Market Data Holds the Key!

Rates on the Move: Dollar Rates Set to Rise, Sterling Rates Poised to Fall - US Labour Market Data Holds the Key!

ING Economics ING Economics 31.05.2023 08:33
Rates Spark: Sterling rates most likely to fall, dollar rates more likely to rise US labour market data could trigger another leg higher in dollar rates but we doubt their euro peers will follow, barring a much stronger inflation print today. Hawkish BoE pricing is vulnerable to a pushback.   US labour market indicators take centre stage The start of the week is proving a constructive one for bonds. It seems the feel-good factor felt by markets, after the White House and House leader McCarthy reached a deal to raise the debt ceiling over the weekend, was short-lived. The deal is due to be voted on today by the lower chamber and later this week by the Senate. We think expectations are for the bill to pass, which also means the market-moving potential of a successful vote is limited. The same cannot be said of any delay on procedural grounds, although more would be needed to shake the market’s optimism.   Instead, the focus should now focus on more fundamental matters for interest rates valuations, namely this week’s two labour market releases. Today sees the publication of the ‘JOLTS’ job openings report, followed on Friday by the non-farm payroll report (which also includes wages). Rate cut expectations last month received a shot in the arm when job openings unexpectedly dropped but payroll data continues to go from strength to strength and we expect investors will be wary of chasing bond yields lower into the report as a result.   We expect investors will be wary of chasing bond yields lower into Friday's job report  
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Central Bank Hikes Spark Concerns: Are More Rate Increases on the Horizon?

ING Economics ING Economics 09.06.2023 08:27
Rates Spark: Worries that more might be needed The Bank of Canada has resumed hiking after a pause, highlighting concerns that elsewhere more might be needed to bring inflation down even as the Fed is mulling a pause of its own. Market rates have adjusted higher again and look vulnerable to more upside in the near term, especially in the US, with supply looming early next week.   The Bank of Canada lends skip narratives globally more credibility If they need any evidence that the current tightening cycle is not of the usual type, rates markets only have to look at the Bank of Canada’s 25bp hike yesterday. It was a move that surprised the majority of economists and came after the bank stood pat since last hiking 25bp in January. The Bank of Canada has led Fed policy in many ways, when it came to starting quantitative tightening or reverting to larger hikes. Now it may well have jumped ahead with the “skip” narrative, just when FOMC members are mulling a pause of their own. While it was previously tempting for markets to read any pause already as the end of the tightening cycle, it shows that an adverse turn of the data can require central banks to tighten the policy screws further.   With regards to the markets’ pricing of the Fed, the implied probability of a hike next week increased moderately to 30%. The probability of a July hike briefly spiked above 90% before falling back to 80%, not far from where it sat before. Yet further out the SOFR OIS forwards for year-end are now back at their highest levels since March at just above 5%.   Inflation concerns and supply add near-term upside to yields   Supply remains a near term factor for rates However, it was longer rates in the 5- to 10-year area that underperformed, with 10Y USTs rising more than 12bp to close in on 3.8%. While the BoC’s decision delivered the decisive push, the rise in yields already started earlier. That may also be owed to the prospect of faster paced Treasury issuance after the lift of the debt ceiling weighing on markets.   True, the rebuild of the Treasury’s cash balance as indicated yesterday to US$425bn by the end of June will mostly come from additional bills issuance, but early next week markets also will face 3Y and 10Y Treasury auctions on Monday and a 30Y auction on Tuesday. It means the bond sales will come around the crucial US CPI release and just ahead of the FOMC decision, volatility events that may warrant additional price concessions.   The US Treasury is about to rebuild its cash account   Upside inflation risks outweigh softer data, also at the ECB In EUR rates markets as well, just ahead of the upcoming ECB meeting, worries about inflation continue to outweigh the impact of softer data. Market have been close to fully pricing a June hike for a while now and see at least one more hike until September. They see a 20% chance that we will have a third hike, reflecting the recent return of speculation that the ECB’s deposit rate could reach the 4% handle.   The ECB’s Schnabel and the Dutch central bank’s Knot were the latest to say more tightening was needed. Schnabel cautioned “given the high uncertainty about the persistence of inflation, the costs of doing too little continue to be greater than the costs of doing too much”. Our own economists also think a hike next week looks like a done deal. More interesting is what the ECB will signal around the further path ahead. Given the current tightening bias evident in minutes of the last meeting and recent commentary as well as the still painfully slow decline in inflation the door should be left open to deliver more. A second hike in July looks likely. A third in September is possible, but not yet the base case.   Today's data and market view The Bank of Canada’s resumption of rate hikes also lends credibility to the skip narrative that Fed officials have increasingly been pushing last week. Despite all positive signs on the inflation front and weaker data, the concern clearly is that central banks may still need to do more. Technical factors like the Treasury supply packed into early next week just ahead of the Fed decision can add a bearish tilt to the market until then, and at least to some added volatility. Main highlight on the data front are the weekly US initial jobless claims. Consensus here is for little change which would indicate a still relatively tight job market. In the eurozone we will get the final first quarter GDP figures. Supply certainly has been a theme in eurozone rates markets, too, especially with Spain printing a €13bn 10Y bond which added to the widening of periphery bond spreads. After recent busy primary markets, only Ireland is scheduled to be active - with two bond taps in the sovereign space today.  
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Economic Snapshot: Unemployment, Inflation, and Trade in Focus

ING Economics ING Economics 09.06.2023 09:11
Unemployment could edge higher in Australia The Australian labour market data for May may show a further increase in the unemployment rate from 3.7% to 3.8%, though this remains very low by historical standards and won’t provide the Reserve Bank of Australia with too much comfort. Employment growth may register a small increase, with last month’s fall in full-time employment and rise in part-time employment likely to swap signs this month.   The Australian labour market may not be powering ahead as it recently did, but it hasn’t yet delivered a clear sign of weakening either, and we aren’t expecting the picture to change this month.   Inflation comfortably within target in India CPI data for May will show inflation remaining comfortably within the Reserve Bank of India's 2-6% target range. We are expecting inflation to come in at 4.3% YoY after a 0.5% MoM increase. Helpful base effects are keeping inflation within the target range for now, but we need to see the MoM trend to move below 0.5% in the coming months to keep it there.     Indonesia's trade balance to remain in healthy surplus Indonesia reports trade numbers next week. We expect both exports and imports to remain in contraction although the drop off may be less pronounced than the previous month. Imports are likely to dip roughly 12.2% YoY while exports may fall by 2.1% YoY, resulting in a sizable trade surplus of $4.7bn. A trade surplus of this magnitude should help keep the current account balance in surplus and could act as one counterbalance to investment related outflows, which would help provide some support to the rupiah.  
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Assessing Rate Expectations: Fed Hike Probabilities, ECB Alignment, Supply Impact, and Market Prepositioning

ING Economics ING Economics 09.06.2023 10:00
For the Fed, the market is currently pricing a less than 30% chance for a hike on Wednesday next week, but it is seeing an 80% chance of a 25bp hike in July. Our house view is that the Fed is already at its peak policy rate, though with the caveat that a higher CPI reading could still eke out a hike next week. In any case, the Fed is likely to leave the door open to more, and in a hawkish no-hike scenario this could be reflected in the dot plots, the FOMC members’ projections of the Fed funds rate     In EUR money markets the pricing of the policy path looks pretty much aligned with the ECB’s own communication. A hike is a done deal for next Thursday and followed by at least one more in the following two meetings in July and September. This is largely in line with our economists’ prediction which sees two consecutive hikes as the base case.   To evaluate central banks’ effective policy stances one can also revert to OIS real rates. At levels closer again to the top of recent ranges, these suggest relatively tight policy circumstances, especially judged against the backdrop of the more mixed macro signals of late. This should give policy makers some comfort with regards to the reception of their recent communication, where the “skip”-narrative, bolstered by the Bank of Canada’s example certainly has helped to curb a more pronounced pricing of cuts further down the line.     Supply can add a bearish tilt especially early in the week The US treasury will issue US$40bn 3Y and US$32bn 10Y bonds on Monday followed by a US$18bn 30Y bond sale on Tuesday. The setup around the CPI release and ahead of the FOMC meeting may warrant extra price concessions from dealers to absorb the duration risk. At the least, this could inject some extra volatility into the market.   Primary market activity will also remain elevated on the eurozone sovereign side. While it was syndicated deals pushing issuance volume higher this week, next week’s scheduled auction supply could already push volumes closer to €40bn - we will see Italy, Germany, Finland, the Netherlands as well as France and Spain all being active with bond sales.   Today's events and market view Today’s session is light on data which suggests some prepositioning into next week’s events. In US markets also with a view to Monday’s and Tuesday’s Treasury supply. Data remains crucial, both for market and central banks as it increasingly guides their policies. While it was the jobless claims data that triggered a more noticeable retracement of yields, their levels closer to the upper end of recent ranges still signal a preoccupation with concerns around stickier inflation - Tuesday's US CPI release looms large.   While we see only a limited ability of the ECB to move especially longer rates higher, while the skip narrative that has been pushed by the Fed and exemplified by the BoC should also prevent markets from prematurely jumping onto hopes that the Fed could be done. A Fed surprise hike could have more of an impact and invert curves as it further plays into the fears that more tightening could be needed to rein in inflation.    
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The Dilemma for the Federal Reserve: To Hike or Hold This Week?

Michael Hewson Michael Hewson 13.06.2023 15:46
To hike or to hold for the Fed this week     When the Federal Reserve last met at the beginning of May raising rates by 25bps as expected, the market reaction was relatively benign. There was little in the way of surprises with a change in the statement seeing the removal of the line that signalled more rate hikes were coming, in a welcome sign that the US central bank was close to calling a halt on rate hikes.     Despite this signalling of a possible pause, US 2-year yields are higher now than they were at the time of the last meeting.     This is primarily due to markets repricing the likelihood of rate cuts well into next year due to resilience in the labour market as well as core inflation. Some of the recent briefings from various Fed officials do suggest that a divergence of views is forming on how to move next, with a slight bias towards signalling a pause tomorrow and looking to July for the next rate hike.      At the time this didn't appear to be too problematic for the central bank given how far ahead the Federal Reserve is when it comes to its rate hiking cycle. The jobs market still looks strong, and wages are now trending above headline CPI meaning that there may be some on the FOMC who are more concerned at the message a holding of rates might send, especially given that the RBA and Bank of Canada both unexpectedly hiked rates this past few days.     With both Fed chair Jay Powell leaning towards a pause, and potential deputy Chair Philip Jefferson entertaining similar thoughts in comments made just before the blackout period, the Fed has made itself a hostage to expectations, with the ECB set to raise rates later this week, and the Bank of England set to hike next week, after today's big jump in wage growth.       This presents the Fed with a problem given that it will be very much the outlier if it holds tomorrow. Nonetheless there does appear to be increasing evidence that a pause is exactly what we will get, with the problem being in what sort of message that sends to markets, especially if markets take away the message that the Fed is done.     If the message you want to send is that another hike will come in July, why wait when the only extra data of note between now and then is another CPI and payrolls report. You then must consider the possibility that these reports might well come in weaker, undermining the commitment to July and undermining the narrative for a further hike that you say is coming, thus loosening financial conditions in the process.     While headline inflation may well be close to falling below 4% the outlook for core prices remains sticky, and at 5% on a quarterly basis, and this will be an additional challenge for the US central bank, when it updates its economic projections, and dot plots.   The Fed currently expects unemployment to rise to a median target of 4.5% by the end of this year. Is that even remotely credible now given we are currently at 3.7%, while its core PCE inflation target is 3.6%, and median GDP is at 0.4%.     As markets look to parse this week's new projections the key question will be this, is the US economy likely to be in a significantly different place between now and then, and if it isn't then surely, it's better to hike now rather than procrastinate for another 5 weeks, especially if you are, as often claimed "data dependant".       By Michael Hewson (Chief Market Analyst at CMC Markets UK)  
Inflation on a Bumpy Path: Unraveling Australia's Price Trends

Inflation on a Bumpy Path: Unraveling Australia's Price Trends

ING Economics ING Economics 15.06.2023 11:44
Inflation is falling, just not in a straight line Australia introduced a monthly inflation series early this year, though many analysts still seem mistrustful of the data and even the RBA still tends to refer to the quarterly figures when talking about inflation. Like the US, Australian inflation ticked up slightly in April, and almost exclusively because the year-on-year comparison was an unfavourable one. Changes in the CPI index on a monthly basis were little different from previous months. This uptick was as predictable as it was irrelevant. Inflation will fall more rapidly in the coming months as it is unlikely that we will see the large monthly increases that characterised global prices in the aftermath of the Russian invasion of Ukraine.     The three-month annualised rate of inflation is a little over 4%, which equates to an average monthly increase of between 0.3% and 0.4%. Last year’s CPI index rose at a faster rate than this. So even if there is no further reduction in the current trend increases in prices, we should see inflation falling by just under one percentage point over the coming three months. That would take headline inflation down to about 5.8-5.9%. Progress after this could be a little more pedestrian for a while. But absent a repeat of the weather/energy supply shocks of last year, inflation should decelerate forcefully again at the end of 2023 and could slow around a further 1.5pp. This should happen even without assuming any further deceleration in the current trend increase in monthly prices and would take inflation down to the mid-4% level, from which a further decline towards the top end of the RBA’s 2-3% inflation target would be in sight.   Real and nominal cash rates (%)
Market Skepticism Persists as Hawkish Narrative Faces Challenges: FX Daily Analysis

Market Skepticism Persists as Hawkish Narrative Faces Challenges: FX Daily Analysis

ING Economics ING Economics 15.06.2023 13:13
FX Daily: Hard times to sell a hawkish narrative The Fed paused yesterday but signalled two more hikes in its dot plot. Markets, however, are not trusting the new projections, and barely price in one more 25bp increase to the peak, likely due to recent softish inflation figures. The ECB won’t have an easier task selling such hawkish rhetoric today, and EUR/USD faces some moderate downside risks.   USD: Dollar bulls can cling on to the dot plot The Federal Reserve matched market expectations for a hold yesterday, but definitely surprised on the hawkish side with its messaging. As discussed in our Fed review note, the FOMC retained maximum flexibility as it signalled openness to further rate increases: the updated dot plot rate projections were reviewed considerably higher from March, and the median projection now includes two more rate hikes in 2023, before 100bp of cuts in 2024. Remember that the March dot plot signalled we had reached the end of the tightening cycle, now only two FOMC members see rates being held at 5.25% until year-end.   The dollar had come into the FOMC announcement with a bearish tone, as PPI figures released yesterday morning showed more encouraging signs of a slowdown in inflation and prompted markets to fully price out a rate hike later in the day.   Despite the hawkish surprise contained in the Fed message – primarily in the dot plot – the dollar failed to rebound. That is because there was an evident dislocation between the Fed’s hawkish signals and the market reaction: investors are carefully weighing the evidence of slowing inflation from the CPI and PPI data, and appear – so far – reluctant to align with the Fed’s projections. The Fed funds futures curve prices in 17bp of tightening for July, and 22bp to the peak.   The post-FOMC pricing is telling us that markets accord higher credibility to data than the Fed’s communication, so more evidence of US disinflation/economic slowdown can prompt more dollar weakness moving ahead. However, with markets underpricing rate hikes compared to the dot plot, we’d be cautious before jumping on a bearish dollar trend just yet, given the high risk of market pricing converging to the Fed’s projections and pushing short-term swap rates higher again.   So, dollar bulls can probably cling on to the hawkish dot plot for now, or at least until (and if) data indicates more unequivocally that there is no longer a necessity to raise rates.   This morning, we are seeing the dollar recovering some ground, although that appears to be primarily driven by the weak activity data out of China and fresh rate cuts by the People's Bank of China.    
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The Rise of Front-End Rates: ECB's Hawkish Stance and Market Impact

ING Economics ING Economics 16.06.2023 09:49
Rates Spark: Keeping upward pressure on the front end After the Fed, the ECB has managed to more than live up to the market's hawkish expectations. The central banks have had some success in giving the high-for-longer narrative more traction and providing especially front-end rates more room to rise. Whether the narrative sticks will ultimately depend on the data.   The ECB more than lives up to hawkish expectations The ECB has lived up to the hawkish expectations, especially on the back of having revised up its own inflation forecasts. In the press conference, President Christine Lagarde used the words we have become accustomed to, that “more ground needs to be covered”. And she heavily hinted at another hike in July. The initial reaction to the ECB decision saw a strong bear flattening of the curve. Note that it mainly comes from pricing out 2024 cuts than pricing in a higher terminal rate. That move later faded somewhat, but 2Y Bund yield still ended 10bp higher on the day, while the 10Y yield was up by 5bp and thus stayed shy of its recent highs at 2.55%. The 2s10s curve now stands at close to -63bp, its most inverted since the banking turmoil in March when the curve briefly hit -73bp.   The inversion is reflective of the ECB having to straddle persistently high inflation on the one hand, but also already weakening economic data on the other. The way the ECB deals with it is to focus on the former while being quite optimistic about the latter. That optimistic view on the economy also gives it more room to keep tightening, keeping front-end yields elevated. But the market will have to account for the increasing probability that this narrow focus on current inflation to determine the ECB's success results in a policy error further down the road. Hence the reluctance in longer rates to follow the front end higher. As a final note, the ECB confirmed that APP reinvestments will end in July. Lagarde signalled that ECB was not worried about the declines in excess reserves in the banking system also with the €477bn TLTRO redemption coming up at the end of this month. Today the ECB will also announce any further voluntary TLTRO repayments from banks.   ECB and Fed were successful in curbing rate cut expectations
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Navigating the Data: Central Banks and Market Concerns

ING Economics ING Economics 16.06.2023 09:50
In the end it all boils down to data That tension between persistently high inflation and recession fears is of course a wider and ongoing market theme. Indeed, yesterday’s market reaction to the ECB and the quick fade was probably more down to mixed US data releases that came out just when Lagarde was set to speak.   More hints that US pipeline pressures are easing came from import prices falling faster than expected. And we also saw the weekly jobless claims grind higher again suggesting a softening of the jobs market. As our economist notes, probably not enough to deter the Fed from a potential hike in July following the hawkish pause this week, but enough to keep the market concerned about the outlook. As opposed to the bear flattening in EUR, the US curve bull flattened with the 10Y UST yield dipping towards 3.7% Overall, central banks this week have given themselves the flexibility and room to tighten policies further should data warrant it, keeping upward pressure on front-end rates. Yield curves could invert further but given how far they already stretch, long-end rates could still follow higher in the near term. Only the Bank of Japan (BoJ) bucked the hawkish trend set by the Fed and ECB (and likely continued by the BoE next week) today by leaving policy rates unchanged and dismissing calls for an adjustment higher of its yield curve control cap, currently standing at 0.5%. The lack of action today and the view put forward that the current spike in inflation will prove temporary leaves the market guessing about the timing of a potential normalisation of the BoJ's policy setting.   The long-end reflects markets skepticism with 2s10s curves inverting further Today's events and market view Some calm may return to markets after the key events of this week. It probably won't last too long with UK inflation and the Bank of England decision lined up for next week. And in the US we will also see Fed Chair Jerome Powell giving testimony to Congress.  As for today, in the eurozone we will see the release of the final inflation figures for May, but more attention should go to the usual flurry of ECB speakers in the wake of the meeting, though Lagarde pointed out the “broad consensus” around yesterday’s decision. And it seems the ECB has been successful in curbing the market's preoccupation with the terminal rate level and focussing it on a high-for-longer discussion – note the pricing out of future rate cuts as a driver of the front-end move higher since last week. The main US data release today is the University of Michigan consumer confidence survey, which also includes measures of longer-term inflation expectations. The consensus is for a slight downtick in the latter to 4.1% year-on-year for the 1-year horizon and to 3% for the 5 to 10-year inflation. But we will also see a number of Fed speakers for the first time after the FOMC meeting. In the end, the data will remain the key, for central banks to assess whether they have done enough on inflation, or markets to discern whether too much has been done already to hurt the economy.
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The Dollar Takes a Backseat: Global Factors Shape FX Market in June

ING Economics ING Economics 16.06.2023 09:54
FX Daily: June tells us the dollar is not the only game in town Despite relatively low levels of volatility, June has so far seen some pretty large spot FX moves in both the G10 and emerging market space. These moves seem to reflect a growing conviction of a soft landing in the global economy and a more hawkish view across the G10 central banks outside of the US. Look out for inflation surveys and central bank speakers today.   USD: Two factors weighing on the dollar We have recently been talking about inverted yield curves and late-cycle dollar strength. Looking at USD/JPY, that seems a fair comment given that it is trading not far from its recent highs and the US 2-10 yield curve is inverting even further (now -94bp) on the back of a hawkish Federal Reserve. However, this month in the G10 space, the dollar is only stronger against the yen and is anywhere from 2% (Swiss franc) to 6% (Australian dollar) weaker against the rest of the G10 currencies. This looks like a function of two factors: The first is the increasing hawkishness shown by the rest of the central banks in the G10 space. Inflation forecasts and expected tightening cycles are being revised higher across the board and in some cases more aggressively than in the US. This includes recent surprise hikes from Australia and Canada, a very hawkish ECB meeting yesterday, and very aggressive expectations for Bank of England rate hikes. The second is the bullish global risk environment. Investors are cutting allocations to cash and look to be putting money to work in bonds, equities and emerging markets. Against all the odds the MSCI world equity index is up 14% year-to-date and fund managers are surprisingly suffering from a Fear Of Missing Out (FOMO) on a good rally in benchmark risk assets. Notably, USD/CNH reversed lower yesterday despite the People's Bank of China rate cut – suggesting that investors are instead more interested in the prospect of upcoming Chinese fiscal stimulus.   Of course, data remain crucially important and will determine whether central banks need to keep rates tighter for longer or can perhaps start to consider rate cuts – as is the case in some parts of Eastern Europe and potentially Latin America too. But that is ING's central call for the second half of the year – that US disinflation will become more evident through the remainder of this year and that a less hawkish Fed will allow the dollar to sell off. Back to the short term, the dollar may well stay soft against most currencies except the Japanese yen, with the Bank of Japan remaining resolutely dovish. Here, yen-funded carry trades will remain popular. For today's data, we have the University of Michigan inflation expectations. This occasionally moves markets and any meaningful drop could nudge the dollar lower. Equally, we have three Fed speakers, generally from the hawkish end of the spectrum.  We think the mood to put money to work probably dominates and barring any big upside surprise in US inflation expectations, DXY can probably edge down to the 102.00 area, if not below.
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RBA Minutes Reveal Close Rate Hike Decision, China's Central Bank Trims Key Lending Rates: Impact on AUD/USD

Kenny Fisher Kenny Fisher 20.06.2023 13:02
RBA minutes state that the rate hike decision was close China’s central bank trims key lending rates The Australian dollar has hit a bump in the road and is down 1% this week. In the European session, AUD/USD is trading at 0.6795, down 0.80% on the day.   RBA minutes – rate decision was close The Reserve Bank of Australia has a habit of surprising the markets. The RBA’s rate hike earlier this month was a shocker, as the markets had expected rates to remain unchanged. The minutes of the meeting, released today, indicated that the decision was “finely balanced” between a pause and a hike. In support of a pause, members noted that the sharp increases in rates raised the possibility of the economy stalling. In the end, however, concerns over persistent inflation won the day as the Bank voted to hike rates by 0.25%. The takeaway from the dovish minutes is that the RBA was very close to taking a pause and will be open to holding rates at the July meeting, depending on the data, especially inflation. The Australian dollar has fallen sharply today as investors have lowered their expectations over future rate hikes. The RBA has backed up hawkish words with action, raising rates to 4.1%, the highest level since 2011. Still, inflation has been stickier than expected, and headline inflation jumped in April from 6.3% to 6.8%. The core rate fell from 6.9% to 6.5%, but that is incompatible with the target of 2%. The RBA has projected that inflation will not fall to 2% until mid-2025, which means more hikes are likely, barring a sharp drop in inflation. China’s central bank announced on Tuesday that it was cutting key lending rates, in a move to boost investment and consumption. The post-pandemic recovery has been slow, and soft demand for exports has been bad news for Australia, as China is a key trading partner. China posted 4.5% growth in the first quarter, which was better than expected, but key indicators such as retail spending and industrial output missed expectations in May. . AUD/USD Technical 0.6772 is under pressure in support. Below, there is support at 0.6668 0.6836 and 0.6940 are the next resistance lines        
UK Inflation Data: BoE's Hopes and Market Expectations. Bitcoin's Recent Trend: Recovery, Vulnerability, and Lower Highs

UK Inflation Data: BoE's Hopes and Market Expectations. Bitcoin's Recent Trend: Recovery, Vulnerability, and Lower Highs

Craig Erlam Craig Erlam 20.06.2023 13:05
Stock markets remain slightly in the red on Tuesday but activity should pick up with the return of Wall Street from the long bank holiday weekend. The focus this week remains on the central banks and whether we are as close to the end of the tightening cycle as everyone wants to believe. While there is the temptation to take what the Fed and others say with a small pinch of salt given their record over the last couple of years and the fact that any pivot was always likely to come late, they have been proven more accurate recently on their assertion that rates need to keep rising.   Markets have been overly optimistic this year and there may be an element of luck on the central bank side – keen to not underestimate inflation again, they were always going to remain hawkish as long as feasibly possible – but the data simply hasn’t justified changing course yet.   That may change over the next couple of months but so far, especially in the UK, the turnaround in inflation has been more akin to a container ship performing a U-turn than a speedboat as many hoped. That may not dramatically increase the terminal rate but it may ensure it remains there much longer. Rate cuts this year look more fantasy than reality now.   The BoE will be hoping for some good news from the UK inflation data tomorrow but I’m guessing policymakers are approaching it with a sense of dread rather than hope. We’re not likely to see any significant progress from the May data but avoiding another nasty surprise may be viewed as a win, allowing the MPC to proceed with 25 basis points rather than 50 which markets are pricing in a 30% chance of at this stage.   Bitcoin’s recent trend remains against it despite recovery Bitcoin drifted a little higher at the start of the week and is continuing to do so today. The move back toward $25,000 may have worried some but it’s recovered relatively well since then. The recent trend remains against it and until it breaks the pattern of lower highs – recovery rallies that fall short of recent peaks before falling again – it will continue to look vulnerable. A break below $25,000 could be another blow although gains this year would still remain extremely healthy.  
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Oil Prices Flat and Range-Bound, Market Braces for Economic Uncertainty. Gold Drifts as Data Awaited, Fed's Stance Holds Firm

Craig Erlam Craig Erlam 20.06.2023 13:07
Oil remains choppy but flat and in lower range Oil prices are relatively flat today, mirroring yesterday’s session which was broadly choppy but ultimately directionless. Crude has rebounded strongly since falling toward its 2023 lows early last week but remains in its lower range, roughly between $70-$80 per barrel and it’s showing little sign of breaking that in the short term. While some believe the market will be in deficit later in the year, aided by the Saudi-driven OPEC+ cuts, which could support prices closer to what we saw late last year and early this, the economy remains one significant downside risk to this amid an adjustment in the markets toward higher rates for longer.   Gold drifting as we await more data Gold has started the week slightly softer but very little has changed, in that it remains in the $1,940-$1,980 range that it has spent the vast majority of the last month. It was a very quiet start to the week which is why gold has basically continued to drift and that may continue until we see a significant change in the data. The Fed last week made it perfectly clear that it doesn’t believe it’s done and its commentary this week, including Chair Powell’s appearing in Congress on Wednesday, isn’t likely to change in any significant way from that. It will be interesting to see if we get any response to UK inflation data as a potential signal of stickiness more broadly but then, there’s every chance it could be viewed as a UK issue, rather than an indication of something more, considering how much more the country has struggled until now.  
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Oil Choppy But Flat in Lower Range as Gold Drifts: Market Analysis

Craig Erlam Craig Erlam 21.06.2023 08:55
Oil remains choppy but flat and in lower range Oil prices are relatively flat today, mirroring yesterday’s session which was broadly choppy but ultimately directionless. Crude has rebounded strongly since falling toward its 2023 lows early last week but remains in its lower range, roughly between $70-$80 per barrel and it’s showing little sign of breaking that in the short term.   While some believe the market will be in deficit later in the year, aided by the Saudi-driven OPEC+ cuts, which could support prices closer to what we saw late last year and early this, the economy remains one significant downside risk to this amid an adjustment in the markets toward higher rates for longer.     Gold drifting as we await more data Gold has started the week slightly softer but very little has changed, in that it remains in the $1,940-$1,980 range that it has spent the vast majority of the last month. It was a very quiet start to the week which is why gold has basically continued to drift and that may continue until we see a significant change in the data.   The Fed last week made it perfectly clear that it doesn’t believe it’s done and its commentary this week, including Chair Powell’s appearing in Congress on Wednesday, isn’t likely to change in any significant way from that. It will be interesting to see if we get any response to UK inflation data as a potential signal of stickiness more broadly but then, there’s every chance it could be viewed as a UK issue, rather than an indication of something more, considering how much more the country has struggled until now.
Summer 2023: A Cool Down on the Inflation Front and Implications for Fed Policy

Stock Markets in the Red as Central Banks Remain in Focus; UK Inflation Data and Bitcoin's Trend Awaited

Craig Erlam Craig Erlam 21.06.2023 08:58
Stock markets remain slightly in the red on Tuesday but activity should pick up with the return of Wall Street from the long bank holiday weekend.   The focus this week remains on the central banks and whether we are as close to the end of the tightening cycle as everyone wants to believe. While there is the temptation to take what the Fed and others say with a small pinch of salt given their record over the last couple of years and the fact that any pivot was always likely to come late, they have been proven more accurate recently on their assertion that rates need to keep rising. Markets have been overly optimistic this year and there may be an element of luck on the central bank side – keen to not underestimate inflation again, they were always going to remain hawkish as long as feasibly possible – but the data simply hasn’t justified changing course yet.   That may change over the next couple of months but so far, especially in the UK, the turnaround in inflation has been more akin to a container ship performing a U-turn than a speedboat as many hoped. That may not dramatically increase the terminal rate but it may ensure it remains there much longer. Rate cuts this year look more fantasy than reality now. The BoE will be hoping for some good news from the UK inflation data tomorrow but I’m guessing policymakers are approaching it with a sense of dread rather than hope. We’re not likely to see any significant progress from the May data but avoiding another nasty surprise may be viewed as a win, allowing the MPC to proceed with 25 basis points rather than 50 which markets are pricing in a 30% chance of at this stage.   Bitcoin’s recent trend remains against it despite recovery Bitcoin drifted a little higher at the start of the week and is continuing to do so today. The move back toward $25,000 may have worried some but it’s recovered relatively well since then. The recent trend remains against it and until it breaks the pattern of lower highs – recovery rallies that fall short of recent peaks before falling again – it will continue to look vulnerable. A break below $25,000 could be another blow although gains this year would still remain extremely healthy.  
GBP/USD Technical Analysis: Sideways Trend and Support Levels

Bank of England Scratches Its Head as Stubborn Inflation Challenges Price Stability Ambitions

Craig Erlam Craig Erlam 22.06.2023 08:31
Policymakers at the Bank of England will be scratching their heads this morning wondering what they have to do to get inflation down, with the latest CPI report another setback in the central bank’s ambition of delivering price stability and a soft landing. While there are many reasons to be confident that inflation should fall sharply over the coming months including lower energy and food price contributions, it’s hard to be too optimistic when the data keeps consistently coming in well above forecasts.   There is clearly immense stubbornness in the UK inflation numbers and the fact that the core also unexpectedly rose yet again by another 0.3% will be a huge concern to the BoE. Services inflation was always going to take longer to regain control of and today’s data once again suggests momentum is strong here. Market interest rate expectations are continuing to fluctuate after the release but there’s clearly now a much stronger case for a 50 basis point hike tomorrow, which would take Bank Rate to 5%. What’s more, markets now see it reaching 6% early next year which could be very damaging and increases the risk of the economy buckling under the pressure. The pound initially spiked after the release, hitting 1.28 against the dollar before giving around half of that back. Higher interest rates for longer against the backdrop of a more resilient economy may remain supportive for the pound for now but as soon as the economy starts to buckle, traders may be forced to rethink.   GBP/USD Technical For a look at all of today’s economic events, check out our economic.
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Michael Hewson Michael Hewson 22.06.2023 12:28
Bank of England set to raise rates again, but by how much?    By Michael Hewson (Chief Market Analyst at CMC Markets UK)     European markets fell for the third consecutive day yesterday, after the IFO in Germany warned that a recession would be sharper than expected in the second half of the year, and UK core inflation unexpectedly jumped to a new 32 year high. US markets also fell for the third day in a row after Fed chairman Jay Powell doubled down on his message from last week to US lawmakers yesterday, that US rates would need to rise further to ensure inflation returns to target.     This weakness in US markets looks set to translate into a lower European open, as we look towards another three central bank rate decisions, from the Swiss National Bank, Norges Bank and the Bank of England all of whom are expected to raise rates by 25bps today. Up until yesterday's CPI number markets were predicting with a high degree of certainty that we would see a 25bps rate hike from the Bank of England later today. That certainty has now shifted to an even split between a 25bps rate hike to a 50bps rate hike after yesterday's sharp jump in core CPI to 7.1% in May.     As inflation readings go it's a very worrying number and suggests that inflation is likely to take longer to come down than anticipated, and even more worrying price pressure appears to be accelerating, in contrast to its peers in the US and Europe where prices now appear to have plateaued. This has raised the stakes to the point that the Bank of England might feel compelled to hike rates by 50bps later today, and not 25bps as expected.     Such an outcome would be a surprise from the central bank given their cautious nature over the years, however such has been the strong nature of recent criticism, there is a risk that they might overreact, in a sign that they want to get out in front of things. Whatever they do today it's not expected to be a unanimous decision, but the surge in core inflation we've seen in recent months, does make you question what it is that Swati Dhingra and Silvana Tenreyro are seeing that makes them think that the last few meetings were worthy of a no change vote.      In the absence of a press conference to explain their actions a 50bps rate move would be a risky strategy, as it could signal they are panicking. A more measured response would be to hike by 25bps with a commitment to go more aggressively at the next meeting if the data warrants it. The big problem the bank has is that they won't get to see the July inflation numbers, when we could see a big fall in headline CPI, until after they have met in August, putting us into the end of Q3 until we know for certain that inflation is coming down.   The resilience in UK core inflation has got many people questioning why it is such an outlier, compared to its peers, however if you look closely enough the reason is probably staring us in the face in the form of UK government policy and the energy price cap, which has kept gas and electricity prices artificially high for consumers. If you look at the price of fuel at the petrol pump it is back at the levels it was prior to the Russian invasion of Ukraine, due to the slide in oil prices from their peaks of $120 a barrel, with consumers already benefitting from this disposable income uplift into their pockets directly in a lower bill when it comes to refilling the family car.  Natural gas prices have gone the same way, yet these haven't fed back into consumers' pockets in the same way as they have in the US and Europe.   This has forced employers here, in the face of significant labour shortages, to increase wages to attract the staff they need, as well as keep existing staff to fulfil their business functions. We already know that average weekly earnings are trending upwards at 7.6% and in some sectors, we've seen wage growth even higher at between 15% and 25%.      These increased costs for businesses inevitably feed through into higher prices in the cost of delivering their services, and voila you have higher service price inflation which in turn feeds into core prices, in essence creating a price/wage spiral. It is perhaps a supreme irony that an energy price cap that was designed to protect consumers from rising prices is now acting in a fashion that is making UK inflation a lot stickier, and making the UK's inflation problem a lot worse than it should be.   So, while a lot of people are blaming the Bank of England for the mess the UK is in, we should also direct some of the blame at the energy price cap, a Labour Party idea that was hijacked by the Conservatives and is now acting as moron premium in the UK gilt market. It is these sorts of poorly thought through political interventions that always have a tendency to come back and bite you in ways you don't expect, and the politicians are at it again, with the Lib Dems calling for a £3bn mortgage protection scheme, another crackpot idea that would push back in the opposite direction and simply make the task of getting inflation under control even more difficult.     On the plus side there are reasons to be optimistic, with the energy price cap set due to be reduced in July, while PPI inflation has also been falling sharply, with the monthly numbers in strongly negative territory, meaning it can only be a matter of time before the year-on-year numbers go the same way.   This trend of weaker PPI suggests that market forecasts of a terminal bank rate of 6% might be overly pessimistic, and that subsequent data will pull gilt yields lower, however we may have to wait another 2 to 3 months for this scenario to play out in the data.     This should still feed into headline CPI by the end of the year, though core prices might prove to be slightly more difficult to pull lower.    EUR/USD – remain on course for the April highs at 1.1095 while above the 50-day SMA at 1.0870/80 which should act as support. Below 1.0850 signals a move towards 1.0780.     GBP/USD – fell back to the 1.2680/90 area yesterday before recovering, having found resistance at the 1.2845/50 area at the end of last week. Still on course for a move towards the 1.3000 area, while above the 50-day SMA currently at 1.2510.      EUR/GBP – found support at the 0.8515/20 area and has move up towards the recent highs at 0.8620. A move through 0.8630 could see a move towards 0.8680. While below the 0.8620 area the bias remains for a return to the recent lows.     USD/JPY – currently finding itself rebuffed at the 142.50 area, which is 61.8% retracement of the 151.95/127.20 down move. Above 142.50 targets the 145.00 area. Support now comes in at 140.20/30.      FTSE100 is expected to open 45 points lower at 7,514     DAX is expected to open 82 points lower at 15,941     CAC40 is expected to open 34 points lower at 7,227
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

ING Economics ING Economics 23.06.2023 11:41
Metals – LME copper on-warrant stocks decline Recent LME data show on-warrant copper stock outflows of 19,175 tonnes, leaving total on-warrant stocks at 30,125 tonnes, the lowest since October 2021. Cancelled warrants rose by 14,850 tonnes to 50,275 tonnes, while total exchange inventories fell by 4,325 to 80,400 tonnes. In zinc and lead, data from the International Lead and Zinc Study Group (ILZSG) show that the global zinc market remained in a supply surplus of 137kt in the first four months of the year compared to a supply surplus of 156kt a year earlier. Total refined production rose by 1.2% year-on-year to 4.56mt, while total consumption rose by 1.6% YoY to 4.42mt between January and April 2023. As for lead, total production reported gains of 2.2% YoY to 4.09mt, while consumption remained almost flat at 4.15mt over the first four months of the year. The lead market was estimated to have seen a supply deficit of 46kt between January and April, lower than the 122kt deficit during the same time last year. As for nickel, the latest data from the International Nickel Study Group (INSG) show that the global nickel market remained in a supply surplus of 20,500 tonnes in April, compared to a marginal deficit of 2,600 tonnes in the same period last year. In its recent bi-annual press release, the group forecast a surplus of 239kt for the global market this year.
Navigating the Inverted Yield Curve: Implications for Currencies and Central Banks      User

Navigating the Inverted Yield Curve: Implications for Currencies and Central Banks User

ING Economics ING Economics 23.06.2023 11:46
FX Daily: The perks of an inverted yield curve The Bank of England surprised markets with a 50bp rate hike on Thursday, and we think a reserve currency like the pound may be kept afloat by a sharply inverted domestic yield curve. This is what is happening with the dollar, which has rebounded despite hawkish surprises elsewhere. Today, the focus will be on PMI releases.   USD: Powell talking up the Dot Plot The dollar found some support yesterday and this morning despite two major hawkish surprises in Europe that might have lured investors further away from the greenback and fuelled a rotation to European currencies. What has likely offered backing to the dollar has been the hawkish message pushed by Fed Chair Jerome Powell in the two days of Congress testimonies. While the overall rhetoric has been nearly identical to last week’s press conference, Powell seemed to add more weight on the near-term prospects of further rate hikes compared to last week – implicitly encouraging markets to close the gap with the Dot Plot projections. For now, that gap is still present. The Fed Fund rate curve is fully pricing in one hike by November, but there are only 18bp factored in by July and – above all – no signs of the other hike included in the latest median FOMC projections. It is clear that investors are awaiting the cue from data to align with the Dot Plot, but Powell’s hawkish rhetoric is a warning signal against jumping too early on a bearish dollar trend given the risks of a further inversion of the US yield curve. Data-wise, the focus will be on PMIs across developed countries today. While being of secondary relevance to the ISM in the US, we can see some higher-than-normal market impact given the elevated market sensitivity to data at this juncture. 102/103 appears to be the holding-pattern range for DXY at the moment and we could see that hold into next week. USD/JPY has continued to press higher, with a dovish Bank of Japan still leaving the yen more vulnerable than other G10 peers. We are now close to the 145 area, where Japanese officials started FX intervention last September.
Trade conditions will improve due to soft commodity prices

Eurozone Monetary Transmission: Impact of ECB Hike Cycle and Weak Economy

ING Economics ING Economics 29.06.2023 09:11
Eurozone monetary transmission remains fast at work Bank lending and money growth continue to weaken as the European Central Bank's historic hike cycle continues to have a significant effect. While this will further dampen an already weak economy, today’s data is unlikely to sway the ECB's thinking on further rises.   Today's monetary developments will be monitored intensely by ECB members, currently away at their annual gathering at Sintra in Portugal. The hawkish tone from the European Central Bank thus far is supposed to prepare markets for a higher-for-longer scenario, but the pace of monetary transmission will be an important driver of how high and how long that will actually be.   Today’s data show that transmission remains significant for the moment as yearly growth in bank lending to the private sector fell from 2.4% in April to 2.1% in May, and money growth right now is negative. Yet again, there are no big swings in today’s numbers that would make the hawks on the ECB governing council nervous.   Bank lending to non-financial corporates picked up ever so slightly in May, Month-on-Month, but the small uptick can better be qualified as broad stagnation. The annual growth rate of corporate borrowing is, therefore, down from 4.6% in April to 4%. While we don’t see a prolonged dip in borrowing materialising for the moment, it is important to note that stagnation in borrowing happens much sooner than in previous hiking cycles. The ECBs own bank lending survey expects demand for borrowing to remain weak and credit conditions to tighten further in the months ahead, which means that further declines in borrowing can not be ruled out.
SEK Update: Encouraging Data Offers Relief Amid Growth Concerns

Sintra's Hawkish Message: Impact on Major Central Banks and FX Market

ING Economics ING Economics 29.06.2023 09:13
FX Daily: How “contagious” are Sintra's hawks? The ECB’s message in Sintra has been firmly hawkish and has helped the euro. Today, a panel with Lagarde, Powell, Bailey and the BoJ’s Ueda will tell us if other major central banks will follow such hawkish rhetoric. It should be the case for Powell (backed by strong data) and Bailey (too early to push back against hike bets), but is Ueda ready to talk up the yen?   USD: Room for rebound The dollar has traded on the soft side since the start of the week, but US data has come in on the strong side, which makes us reluctant to think the dollar has much further to fall in the second half of the week and ahead of today’s Sintra speech by Federal Reserve Chair Jerome Powell.   Yesterday, all US data releases beat consensus. Durable goods orders rose in May despite expectations for a drop and the S&P Case Shiller US house price index rose for a third month in a row in April as tight supply keeps prices supported despite weak buyer demand in response to surging mortgage rates. Home sales also rose more than expected and consumer confidence jumped to 109.7, the highest since January 2022 (despite being considerably below pre-pandemic levels). Today, the US data calendar is lighter: MBA mortgage applications and wholesale inventories.   While those are not the set of data points either the markets or the Fed primarily focus on, they surely point to some resilience in key parts of the US economy and would underpin a reiteration of a hawkish message by Powell today. That would probably take the shape of a further endorsement of dot plot rate hike projections (two more before the peak) with potentially an additional pushback against rate cuts.   Markets continue to price only another 28bp of tightening and a 73% implied probability of a July hike, so there is still ample room for a hawkish repricing in the USD curve. We’d be cautious when jumping on a dollar bear trend before the data gives a more solid basis to justify the market's dot plot gap.
Challenges Ahead for Austria's Competitiveness and Economic Outlook

Central Bank Dilemma: Balancing Balance Sheet Strategies Amid Cautious Voices and Inflation Pressures

ING Economics ING Economics 29.06.2023 09:35
But there are also more cautious voices on the topic. Just as Lagarde pointed out in yesterday’s panel, interest rates remain the ECB’s primary monetary policy tool. In another background report by Econostream released in the afternoon, ECB officials signalled that the current passive run-off was sufficient, and especially speeding it up via the changes to the PEPP guidance and/or reinvestments would unnecessarily risk financial stability.   After all, the possibility to flexibly reinvest PEPP holdings is one of the main tools that the ECB still has to quickly react to spread widening pressures in bond markets. At some point the ECB has to decide on the balance sheet size it wants to target, which goes hand-in-hand with an ongoing review of the ECB’s operational framework. Yesterday, Lagarde flagged that this work could hopefully be completed in the next “six to nine months”. This indicates some upside risk to previous communication which saw the review being concluded by the end of the year.   Today's events and market view Inflation remains the central banks’ one needle in the compass that dictates their policy nowadays. This puts the focus squarely on today’s inflation readings out of Germany and Spain. German headline and core rates are seen higher on the back of base effects and statistical tweaks. Spain’s headline rate is seen falling below the 2% level but, more importantly, the core rate is seen to come down only marginally.   Alongside Italy’s data from yesterday this should already give a good idea of where tomorrow’s eurozone reading is headed – and it should signal no let up in the pressure on central banks to continue to act forcefully.   In this set-up yield curves will remain inverted for some time. Markets will see the softness in wider data, such as in yesterday’s eurozone credit growth which shows that policy transmission is working. Still, if there is anything that could turn the market it is surprises in the inflation data, which markets might be quicker to extrapolate even if central banks themselves might want to see confirmation from more than just one reading.   In other data we will get the initial jobless claims out of the US, pending home sales, as well as a third reading for first quarter GDP growth.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Navigating the Risks: Uncovering the Vulnerabilities of Non-Bank Financial Intermediaries

ING Economics ING Economics 29.06.2023 13:40
The sector is facing three main vulnerabilities Non-Bank Financial Intermediaries were thrust into the spotlight once again this year following the recent turmoil in the banking sector. The main concerns arise from the lighter regulations and consequent lack of data and estimation of their risk exposure. While it remains difficult to clearly assess the sector’s exact exposures, international institutions identify three main risk factors stemming from the current state of the sector namely: financial leverage, liquidity risk and interconnectedness.   1. High financial leverage in times of lower interest rates Low interest rates in recent years and asset price volatility incentivised investors to use leverage to boost returns. However, the level of vulnerability from leveraging has proved to be difficult to estimate both for authorities and market participants. The significant lack of data makes a concrete estimation of the risk challenging. Furthermore, the IMF has stressed that financial leverage used by NBFIs comes in many forms, such as the use of repurchase agreements, margin borrowing in prime brokerage accounts, or synthetic leverage associated with the use of various financial derivatives (like futures and swaps). The recent focus on the use of leverage comes from the increased risk of financial distress due to the higher vulnerability to sudden changes in asset prices as interest rates increase rapidly. This may force NBFIs to de-lever, amplifying the initial price decline, with the gilt crisis being a case in point. The graph below from the IMF highlights well the recent increase in the use of synthetic leverage (where banks and NBFIs are lumped together), hence the growing vulnerability to sudden interest rate shocks.   The proxy for synthetic leverage shows an increase in leverage use by banks and NBFIs since 2016 The use of leverage dropped between 2018 and 2020 before spiking again until 2021 and stabilising today  
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

The Impact of NBFIs on Banking Crises: Examining the Role and Risks of Non-Bank Financial Intermediaries

ING Economics ING Economics 29.06.2023 13:52
A banking crisis may also be worsened by the presence of NBFIs We have looked at the effect of stress on the NBFI sector. However, if there is a stress in the banking sector, NBFIs may also exacerbate that stress, even if the are relatively safe themselves. During the banking crisis earlier this year, inflows to US money market funds were at an all-time high. Part of this has correlated with deposit outflows from US banks. In the unlikely, but not impossible, event of a flight from banks into money market funds, this could put banks under severe stress.   The largest 'known unknown' As mentioned before, no data currently exists to allow us to make a clear assessment of the impact on banks if NBFIs were to see significant stress events. The difficulty stems from the lack of data on the sector. Indeed, even though the regulatory requirements vary between NBFI sub-sectors, there remains a general lack of regulation and data requirements. Without data giving a clear overview of NBFIs, one can only broadly estimate where the vulnerabilities stand: which are probably mostly in the US. We also know the vulnerabilities (leverage, liquidity and interconnectedness) as well as the direct and indirect channels through which the risk might propagate to the traditional banking sector. All in all, we see this as the largest "known unknown" risk for the financial system.
Summer's End: An Anxious Outlook for the Global Economy

Resilient US Data Fuels Rate Surge: Pre-SVB Levels in Sight

ING Economics ING Economics 30.06.2023 09:55
Rates Spark: US resilience persists Inflation is what central banks are focused on, but resilient data is lending their hawkish positions more credibility. 10Y UST yields are testing the top of recent ranges after yesterday's data, and it also looks like front-end yields want to reclaim their pre-SVB highs soon. Key to achieving this will be data, and next week holds another busy slate.   US rates on their way to pre-SVB levels As much as inflation is in the spotlight these days, it was the revision to the US first quarter GDP data that elicited the larger reaction from markets yesterday. They were quick to price in a greater chance for a second hike from the Federal Reserve. It had been flagged as a possibility by Fed Chair Jerome Powell only recently in Sintra, but markets were previously reluctant to price it in. Now they see a 40% chance of it happening, even if not as back-to-back increases. The overall US yield curve shifted higher and the curve inversion has deepened further. The 10Y US Treasury yield is now effectively at 3.85%, and the 2Y is back above 4.8%, stretching the 2-10Y inversion back above 100bp. There's room for the 2Y to rise back to 5%, based on the likelihood that the market prices out the rate cut bias just about discounted for the December 2023 meeting and certainly beyond. Through the end of 2024, markets are more than fully discounting five 25bp rate cuts from the peak. Remember the 2Y was above 5% just before the banking turmoil around Silicon Valley Bank ensued. We can still see the 10Y getting back up to the 4% area. Again, back to where it was before the SVB-induced rally in bonds and sell-off in risk. A lot of this has reversed in the past months or so as risk has been bought and market rates have managed to march higher. There had been some flatlining in the past week or so, but data like yesterday’s maintain the upward pressure. Looking ahead at today’s monthly core PCE reading seen coming in at 4.7%, it reminds us that the US is still closer to a 5% inflation economy. We do think inflation will eventually ease, but for now, it is what it is until proven otherwise.   10Y UST yields are testing the upper end of their recent range   A US focused week ahead While the 4th of July holiday has come to mark the beginning of usually quieter summer conditions, the data calendar is still packed with key releases. Yesterday has highlighted the degree to which the credibility of the Fed’s higher-for-longer narrative hinges on the data. If activity refuses to lie down yields can only rise further.   The first key data set will be the ISMs, in particular the services report on Thursday. Recall that the May report had seen a big downward surprise falling to 50.3 from 51.9, with weaker readings in the past 14 years only seen during the pandemic in 2020. Even the employment sub-component had dropped to below 50, contradicting the earlier strong payrolls report. All eyes will be on whether the services sector joins the manufacturing sector, which looks like it is already in recession with its seven consecutive sub-50 readings. For now, the consensus is for the services report to increase to 51.1. The manufacturing report for June will be out on Monday. The final data highlight is the June employment report. May had seen an extraordinarily strong report with a non-farm payrolls increase of 339k – but it was also a mixed report, with the employment rate jumping to 3.7% and moderating wage growth. For June, the consensus is eyeing a 213k payroll increase and unemployment easing back to 3.6%.   Today's events and market views Inflation data is today’s main focus, both in the eurozone and in the US. As far as the eurozone flash CPI is concerned – where consensus is looking for a 5.6% year-on-year headline and a higher 5.5% core reading – country data over the past days has already provided some indication, with German inflation coming in higher than consensus for instance. In the US, the Fed's favoured inflation measure, the core PCE reading, is expected to stay at 4.7% YoY. The headline rate is expected to drop to 3.8% from 4.4% previously. The upshot from both US and eurozone data should be that the central banks' jobs are far from over, although the backdrop for the Fed does look comparatively more encouraging than for the European Central Bank.  In primary markets, we will only see Italy being active today with 5Y, 10Y and 30Y bond taps of up to €7.5bn in total. 
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

ING Economics ING Economics 03.07.2023 08:16
Glimmers of hope for US inflation slowdown The Federal Reserve's favoured measure of inflation slowed fractionally more than expected, but there was clearer evidence of softening in the so-called "super core" measure that Fed Chair Jay Powell has been focusing on. There is also evidence of a loss of momentum in spending which will dampen prices pressures further down the line   Incomes rose, but spending stalled in May The May US personal income and spending report in aggregate is a touch softer than predicted. Incomes rose 0.4% month-on-month, above the 0.3% MoM expectation, but then we had a corresponding 0.1pp downward revision to April's growth rate from 0.4% to 0.3%. The more interesting story is on the expenditure side with nominal personal spending rising only 0.1% MoM versus 0.2% expected and there were downward revisions to April (from 0.8% to 0.6%). This leaves "real" consumer spending softer at 0% and April was revised down to 0.2% MoM from 0.5%. This means the savings rate has risen from 4.3% to 4.6%.   2Q growth looks to be a fair bit weaker than 1Q as momentum fades For those that like digging into data, the MoM real consumer spending change was -0.03% MoM to two decimal places. This means if we get a +0.2% MoM real consumer spending print for June, we will have quarter-on-quarter annualised consumer spending of 1% for the second quarter, down from 4.2% in the first. 0.1% MoM for June works out at 0.9% QoQ annualised for 2Q. while 0% MoM reading for June real spending generates 0.8% QoQ annualised. This report suggests a fair bit of spending momentum has been lost as we progress through 2Q. We are currently pencilling in 0.2% MoM for real spending growth in June. So far, weekly chain store data (Redbook) has been soft and restaurant dining is currently (according to Opentable) running at -3% year-on-year and hotel occupancy is running at roughly -1.5% YoY for June (to June 24) according to our interpretation of STR data. TSA airport security check numbers are up though. A 1% QoQ annualised consumer spending number would leave us struggling to get GDP growth above 1.5% in 2Q.   Service sector inflation appears to be topping out (YoY%)   Early signs of softening in Fed's "super core" inflation measure Rounding the report out, we see the Fed's favoured measure of inflation, the core PCE deflator coming in at 0.3% MoM/4.6% YoY. A touch softer than the 0.3%/4.7% expected. At 4.6%, this is the slowest rate of core PCE inflation since October 2021. Based on my calculations, the core PCE deflator ex-energy and ex-housing (Fed Chair Powell is focusing on this as it is this component that is most heavily influenced by the tightness in the jobs market since wages make up the biggest cost input and in which demand has been robust) also slowed to 4.6% from 4.7% YoY while Bloomberg’s calculations back this up, saying on a MoM basis it came in at 0.23% MoM versus 0.42% in April. This is a really encouraging story since we need to see 0.1s or 0.2s MoM to get inflation to 2% YoY over time. It is early days, but NFIB corporate pricing intentions data and ISM prices series offer clear hope that we will soon consistently see these sorts of figures.
UK Labor Market Shows Signs of Loosening as Unemployment Rises: ONS Report

The Future of Metaverse Technology: Navigating the Shifting Investment Landscape

Simon Peters Simon Peters 07.07.2023 12:13
The world of technology continues to evolve rapidly, with new trends and concepts emerging. One such concept that has gained attention is the metaverse, a virtual universe where people can interact and engage in various activities. However, recent data from DappRadar reveals a surprising trend: investments in the metaverse have accounted for a mere 10% of the figures recorded during the same period in the previous year. This raises questions about the future trajectory of metaverse technology and its place in the investment landscape. To gain insights into this evolving landscape, we turn to Simon Peters, a Crypto Market Analyst at eToro. According to Peters, the first half of the year has been dominated by the buzz surrounding artificial intelligence (AI). Companies involved in AI, such as NVDA and META, have seen impressive performance in the market. This shift in focus from the metaverse to AI-related projects may have had a negative impact on the prices of metaverse-related crypto tokens.      FXMAG.COM: Data from DappRadar shows that in the first half of 2023, investments in the metaverse barely accounted for 10% of those in the corresponding half of the previous year. What's next for metaverse technology?   Simon Peters, Crypto Market Analyst at eToro, said: AI has been the 'buzzword' in the first half of the year. From NVDA to META, companies with exposure to AI have typically been the best performers this year. Perhaps investors' focus has shifted away from the Metaverse to more AI related projects and this, in turn, has negatively affected the price of Metaverse related crypto tokens. Price direction will be tied to the macroeconomic climate. Factors including cooling inflation, a pause in interest rate hikes and advancement in crypto regulation could be positive for asset prices in the near future. Nevertheless, the concept of the metaverse is still very much in its infancy. With more and more people shifting towards remote working and spending more time online, this space has massive potential.  
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Norges Bank's Battle Against Inflation: The Impact on the Norwegian Krone

Jakob Westh Christensen Jakob Westh Christensen 07.07.2023 12:00
The Norwegian economy and the actions of the country's central bank, Norges Bank, have been closely observed amidst the challenges posed by inflation and its impact on the Norwegian krone. In light of the latest data from the Norwegian economy, market participants eagerly seek insights into the central bank's response and its implications for the currency.   According to Jakob Westh Christensen, eToro Nordic Market Analyst, Norway took early action in addressing inflation concerns. When inflation emerged globally towards the end of 2021, the ECB and the Fed viewed it as transitory and delayed taking action. In contrast, Norges Bank promptly implemented its first interest rate hike in September 2021. Although the country has managed to keep inflation below double-digit levels experienced by other European nations, recent data paints a concerning picture. In May, inflation in Norway rose to 6.7% from 6.4% the previous month, indicating a worrying upward trend.     FXMAG.COM:  How would you comment on the latest data from the Norwegian economy and the actions of the central bank there, and what about the Norwegian krone as a result?    Jakob Westh Christensen, eToro Nordic Market Analyst said: Towards the end of 2021, when inflation began to emerge around the world, and the European Central Bank (ECB) and the Federal Reserve (Fed) saw the inflation as transitory and failed to act, Norges Bank (Central Bank of Norway), acted promptly by implementing its first interest rate hike in September 2021. Despite successfully keeping inflation below the double-digit levels experienced by many European countries, the Scandinavian country has yet to witness the same decline in inflation as most other countries are currently experiencing. On the contrary, the latest data shows a concerning increase in May, with inflation rising to 6.7% from 6.4% the previous month. Thanks to its self-sufficient energy production and government support, Norway has been shielded from the severe energy price spikes that affected many other European countries. But their tight labour market and the weak currency continue to fuel inflation. The country, with a population of 5.5 million, has a tight labour market with an unemployment rate of just 3.5%, experiencing robust wage growth. At the same time, the depreciation of the Norwegian krone against the US dollar and the euro further complicates the situation for the import-dependent economy, driving up the costs of everyday imported goods. The decline in oil prices explains part of the oil-exporting nation’s weakened currency. But also, the diminishing interest rate differential with major economies like the US and the Eurozone reduces the attractiveness of holding the Norwegian currency for investors. To counter the weakening of the Norwegian krone and combat inflation, Norges Bank raised the policy rate by 0.50 percentage points to 3.75% in late June, providing some support for the currency. However, the central bank acknowledges that the fight is far from over and has indicated the likelihood of another rate hike at the upcoming meeting in August, with the policy rate potentially rising to 4.25% during the autumn. While Norges Bank was the first to enter the battle against inflation, it might turn out that they will also be the last to leave it.  
FX Daily: Evaluating Short-Term Dollar Bearishness and Potential for Rebound

FX Daily: Evaluating Short-Term Dollar Bearishness and Potential for Rebound

ING Economics ING Economics 10.07.2023 10:57
FX Daily: Short-term dollar bearishness remains unconvincing We remain a bit reluctant to chase the dollar lower. The greenback still has to catch up with recent market dynamics – higher US rates in particular – and the scope for further dovish repricing in the USD curve is not broad. This week’s US CPI is undoubtedly a risk event, but we don’t see a EUR/USD move above 1.1000 as being very sustainable just yet.   USD: Room for a rebound Last week saw the dollar trade on the soft side amid mixed data from the US. The latest and most important release, the US payrolls figures for June, came in a bit weaker than expected, but the jobs market likely remains too tight for the Fed to backtrack on a July hike. After all, the headline print was solid (+209k) and with wages remaining high and unemployment moving lower, there aren’t many strong dovish arguments to be extrapolated from the June jobs report. We are still reluctant to chase the dollar lower from this point – not particularly because we expect incoming data (US CPI above all) to surprise on the upside, but because the dollar still has to catch up with some recent market dynamics. Front-end US treasuries arrested their selloff, but remain very close to 5.0%, and 10Y UST are at the 4.0% benchmark level. Equities have also shown some signs of instability since the start of July. All of this should, in theory, put the dollar in a solid position to rebound from the current levels – especially given there isn’t much room for a further dovish re-pricing in the USD swap curve. That currently factors in 35bp of tightening to the peak, still short of the 50bp signalled by the Fed in the latest dot plot. The big risk event for the dollar this week is the June inflation report on Wednesday. Our economist expects a consensus 0.3% month-on-month core read, which should keep providing encouraging news on the disinflationary story – but should still fall short of tweaking the Fed narrative or convincing markets to price out a July hike. A downside inflation surprise could see DXY test the 101.00 April lows, but we think that the dollar could instead find some support into the CPI release and stabilise in the second half of the week. Today’s calendar includes some Fed speakers: Michael Barr, Mary Daly, Loretta Mester and Raphael Bostic. Elsewhere, we expect the Bank of Canada to hike by 25bp this week. This is far from a consensus view, with the pool of economists split between a hold and a hike and markets pricing in around 67% of implied probability of an increase. We explain our reasons in our latest Bank of Canada meeting preview.
Market Reaction to Eurozone Inflation Report: Euro Steady as Data Leaves Impact Limited

Eurozone Outlook: Gradual Appreciation of EUR/USD Supported by Tight Labor Market and Hawkish ECB Stance

Roman Ziruk Roman Ziruk 07.07.2023 12:12
In light of the latest data from the Eurozone, market participants are keen to gain insights into the future forecast for the euro (EUR). We turn to Roman Ziruk, Senior Analyst at Ebury, to provide valuable perspectives on the current economic landscape and the potential trajectory of the EUR. Despite a marginal downside surprise in core inflation figures for June, the Eurozone's core inflation remains persistently high. This, coupled with the tightness of the labor market and the European Central Bank's (ECB) hawkish stance, as reiterated by President Lagarde, supports the view that the bank's tightening cycle will be extended. Ziruk predicts that there will be at least a couple more interest rate increases and no rate cuts in the near future.  In this article, we delve into the factors supporting Roman Ziruk's outlook for the EUR and explore the potential implications for the Eurozone's economy and the EUR/USD exchange rate in the foreseeable future.   FXMAG.COM:  In light of the latest data from the Eurozone, what forecast can you make for the EUR? Roman Ziruk, Senior Market Analyst: Although core inflation in the Eurozone surprised marginally to the downside in June, it remains stubbornly high. This, combined with the tightness of the Eurozone’s labour market and the ECB’s hawkish stance, reiterated by President Lagarde at Sintra last week, supports our view that the bank’s tightening cycle will last longer, rates will be increased at least a couple more times and no rate cuts are in the offing anytime soon. Although some of the recent economic data, particularly the PMIs, have been disappointing, we maintain our view that the scale of the slowdown in the Eurozone need not be very significant, nor do we expect a full-year recession in 2023. Therefore, we continue to pencil in a gradual EUR/USD appreciation in the coming quarters to 1.12 at year-end and 1.15 at the end of 2024       Informacje zawarte w niniejszym dokumencie sÅ‚użą wyÅ‚Ä…cznie do celów informacyjnych. Nie stanowiÄ… one porady finansowej lub jakiejkolwiek innej porady, majÄ… charakter ogólny i nie sÄ… skierowane dla konkretnego adresata. Przed skorzystaniem z informacji w jakichkolwiek celach należy zasiÄ™gnąć niezależnej porady. Ebury nie ponosi odpowiedzialnoÅ›ci za konsekwencje dziaÅ‚aÅ„ podjÄ™tych na podstawie informacji zawartych w raporcie.   Ebury Partners Belgium NV / SA jest autoryzowanÄ… i regulowanÄ… przez Narodowy Bank Belgii instytucjÄ… pÅ‚atniczÄ… na mocy ustawy z dnia 11 marca 2018 r., zarejestrowanÄ… w Crossroads Bank for Enterprises pod numerem 0681.746.187.  
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Rates Spark: Competing Narratives and Inflation Focus

ING Economics ING Economics 18.07.2023 08:45
Rates Spark: Competing narratives The easing inflation narrative has gained traction, but we have not seen that much pushback yet. Central bank hawks might take comfort in real rates still signalling a relatively tight effective policy stance stance. In any case, data today should shift the macro backdrop into focus. It is the 'landing' that is more relevant for longer rates.   Keeping a firm grip on inflation The market has seen a remarkable shift from trading inflation risks on the back of a resilient labour market, toward an easing inflation narrative on the back of one CPI print. The market was quick to extrapolate the surprise, but as of now it's only one CPI print and that hardly constitutes a trend. But a trend is what central banks will need to see before they decide not to change their hawkish bias. But it is also worth noting that when the effective policy stance as measured by real OIS rates is considered, we are actually close to the tightest levels of the cycle in 2Y or 5Y rates, for instance, both in the US and eurozone. This is especially the case in the eurozone, where there are still a couple of days left to manage expectations ahead of the next European Central Bank policy-setting meeting. This is something the more hawkish governing council members may take comfort in when they see their dovish colleagues becoming more vocal of late. Bank of Italy Governor Ignazio Visco this morning suggested that inflation could fall faster than forecast. Bundesbank’s Joachim Nagel was on the wires yesterday saying that he expects a 25bp hike next week, but that data would decide the September move. Coming from a prominent policy hawk, that sounds slightly more cautious, although he still called for patience saying it is too early to declare victory over inflation. Still, for a market that has another hike after July more than fully priced by the end of the year, it suggests the balance of risks is to the downside for those short rates. However, longer EUR rates are currently more driven by where the ECB is seen landing after it has tackled inflation rather than by the fine-tuning of the terminal rate. Since late March, for instance, 1-month rates 3 years forward had the highest explanatory power for 10Y swap rates, and that skewed further out the curve increased when considering only the past month.    Despite shifting narratives, the effective policy stance remains relatively tight   Today's events and market view There is little in the calendar today to feed the easing inflation narrative, but we should get more hints of a softening growth story.   The main data points to come out of the US are the release of retail sales and industrial production data. Regarding the latter, our economists point out that the ISM manufacturing survey has been indicating contraction for eight consecutive months, while lower energy prices have resulted in a fall in oil and gas drilling rigs operating in the US. Retail sales will be lifted by rebounding auto sales numbers and higher gasoline station sales, but outside of these components, our economist expects sales to struggle. Incrementally that might push yields lower, but we also caution that the Fed has basically entered the black-out period with the view that one CPI print does not constitute a trend and will not cause a strategy rethink. That would imply that the yield curve might absorb more of the price action with near-term flattening. In the eurozone, the ECB's Klaas Knot and Francois Villeroy are scheduled to speak. Villeroy recently also pointed out the good news on inflation that was starting to emerge. Supply will come from Germany in the form of a new 2Y Schatz. The UK will sell 30Y linkers.
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Retail Sales Fail to Dampen Wall Street as Bank Earnings Inspire Investor Confidence; Dow Faces Major Obstacle at 35,000

Craig Erlam Craig Erlam 19.07.2023 08:20
Retail sales numbers don’t hold Wall Street back Bank earnings give investors hope 35,000 a big obstacle to overcome for the Dow   Stock markets have turned positive on Tuesday after falling earlier, with US retail sales data initially weighing slightly. The numbers were much weaker than expected for June but then the May figures were revised up so it wasn’t all bad. I’m not convinced today’s data really changes things as far as the consumer or economy is concerned, all things considered, nor has it really changed anything on interest rate expectations, with markets almost fully pricing in a hike next week and probably no more after that. Wall Street was also buoyed by Morgan Stanley and Bank of America results which gave investors some further cause for optimism early in earnings season. Of course, this is just one hurdle cleared but investors will be hoping it’s a sign of things to come.   35,000 the next big obstacle for the Dow US30 Daily   The US30 has rallied almost 1% today but it quickly ran into resistance around 35,000. This level has previously been a key area of support and resistance, most recently in December, and it’s proving to be the case again. A break above here would be significant as the US30 hasn’t traded above here since April last year when it peaked around 35,500. This would be the next notable resistance level if it can overcome 35,000.  
GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

ING Economics ING Economics 19.07.2023 10:08
GBP: Good news on inflation, bad news for the pound Lately, we have been pointing at the pound’s vulnerable position. Markets' aggressive tightening expectations required data to offer no hints of abating price pressures and an overstretched positioning (on the long-end). It appeared that some long positions had been scaled back already ahead of this morning’s key CPI release, with the pound underperforming in the G10 space yesterday. Looking at the June figures released this morning, there is finally some encouraging news for the Bank of England. Headline inflation slid back below 7.9% (below consensus), illustrating a 0.4% MoM increase which has been the slowest seen since early 2022. We know that the BoE is mostly focused on service inflation, and there was good news here too – a decline from 7.4% to 7.2%, contrary to the BoE’s expectations. The question now is whether this is enough to tilt the balance to a 25bp hike in August. We are inclined to think so, even though it remains a close call. The post-CPI Sonia curve looks significantly changed, with 36bp priced in for August and 90bp to the peak, which marks a huge 55bp shift since last week. In FX, the pound is under pressure, down around 0.70% against the dollar. We suspect there is more room to fall in GBP/USD, especially if our expectations for some dollar support into the FOMC prove to be correct. A move to the 1.2800 area in Cable looks possible even before the BoE meeting. EUR/GBP has spiked, but we suspect markets may like some bullish narrative on the euro side beyond the 0.8700 level, and that may not come just yet if the ECB turns fully data-dependent and the eurozone outlook remains lacklustre at best.
Europe's Economic Concerns Weigh as Higher Rates Keep US Markets Cautious

USD/JPY: Pre-FOMC Consolidation as Investors Await Fed and BOJ Decisions

Kenny Fisher Kenny Fisher 26.07.2023 09:02
USD/JPY       Dollar-yen has entered its pre-FOMC/BOJ consolidation range.  Heading into the FOMC decision the data has been holding up.  The US economy has still yet to feel the complete impact of the Fed’s rate hiking campaign as the flash PMIs showed that business activity is slowing and as consumer confidence surged to a two-year high.  Wall Street wants to believe the Fed will be one and done, but the data might not allow that to happen.  They are likely to signal an extended pause, but hold onto a tightening bias, which could help push dollar-yen higher initially.  Will USD/JPY rise towards prior intervention levels around the 145 is the big question at hand.  A short-term advance in the dollar seems possible going into and that could extend post Fed if policymakers focus on the resilience of the US economy. The bigger driver for USD/JPY might stem from the BOJ decision.  There was a chance that we could get a Yield Curve Control (YCC) tweak, but that seems less likely.  A key Tokyo CPI report will occur hours before the BOJ decision, but probably won’t sway the bank unless it comes scorching hot.  The BOJ should deliver a tweak, but Ueda’s comments from a conference in India last week suggest they will stay the course with their ultra-loose monetary stance.  The BOJ might eventually need to trigger an abrupt change to policy given the trajectory of the US economy and how high inflation has turned. To the downside, a break of the 140 level could see momentum selling target the 137.50 region.  The 142.50 level should provide initial resistance, with the 145 level likely to trigger calls of future currency intervention.  
EU Investigates Chinese Electric Vehicle Subsidies, Impact on the EV Market

FX Daily: Fed Patience Supports Risk Assets, Eyes on ECB Meeting

ING Economics ING Economics 28.07.2023 08:26
FX Daily: Fed patience provides breathing room for risk assets The market reaction to last night's FOMC statement was a mildly positive one, as Chair Powell's acknowledgement that the Fed could afford to be a little patient saw US yields and the dollar soften slightly. Today, all eyes will be on the ECB, where a 25bp hike is widely expected along with the door being left open for another hike in September.   USD: A little early to chase the dollar lower In the end, the dollar tracked US yields and marginally softened after yesterday's FOMC rate decision and press conference. Fed Chair Jerome Powell delivered another credible performance, and it seemed that markets – perhaps because of positioning – latched onto comments that the Fed "could afford to be a little patient" as a result of all the tightening implemented so far. US two-year yields edged some 7-8 bps lower, and December 2024 futures contracts priced Fed Funds some eight ticks lower at 4.07%, embracing five 25bp cuts in 2024. One of the clearest messages coming through from the press conference was that Chair Powell felt the Fed was "not in an environment where we want to provide a lot of forward guidance". In other words: listen to the data, not the Fed. On that subject, he highlighted that by the time of the next meeting on September 20th, the Fed would have two new CPI reports, two new job reports, and the Employment Cost Index (which will be released tomorrow).  While the dollar is a little lower today post-Fed, we would not chase the move just yet and prefer to take our cue from the data, starting with tomorrow's ECI. As we discussed in our FOMC review, the carry trade environment will still be popular and with overnight deposit rates at 5.25%, the dollar is clearly not a funding currency. Beyond the ECB meeting today, the US calendar should see some downward revisions to second quarter GDP, durable goods orders, and initial jobless claims. Of these, claims might be the most important given the ongoing need to see tight conditions ease in the US labour market. Barring any hawkish surprise from the ECB today, DXY should trade within a 100.60-101.20 range.
Turbulent Times Ahead: Poland's Central Bank Signals Easing Measures

China's Non-Manufacturing PMI Slows: Economy Faces Contraction Risks

ING Economics ING Economics 31.07.2023 15:49
China: PMI’s show non-manufacturing growth slowing further The decline in manufacturing eased slightly in July, but the non-manufacturing sector showed a larger-than-expected slowdown in growth and further falls could see it skirting with contraction.   At this rate, the service sector will join manufacturing in contraction China's official PMI data provides little encouragement that the economy is turning the corner. And while the authorities have been vocal in their support for the economy, so far, that has not translated into the sort of sizeable fiscal policy stimulus many in the market have become used to expecting. We don't think it is coming.  The key figure in today's release is the non-manufacturing sector PMI. This fell from 53.2 to 51.5, with 50 representing the threshold between growth and contraction. A further fall like the one we saw this month could push the non-manufacturing sector close to contraction, joining the manufacturing sector, which, while it improved slightly from a month ago, at 49.3 remains in negative territory.    Headline PMI indices   Prospects for the non-manufacturing sector aren't great Looking at the breakdown of the non-manufacturing sector, what strikes you is that most of the sub-components are already showing contraction. The one component that stands out from the rest, is expectations, which looks like an unrealistic outlier compared with what is going on elsewhere.  We can only put this down to continued hope that the government will pull something out of the bag that will re-invigorate the economy. However, while we believe that a great many micro measures will be implemented to improve the functioning of the economy, including a reduction in constraints on the private sector, we aren't at all convinced that there is a fiscal bazooka waiting to fire up the economy. So, if those expectations aren't fulfilled and begin to wilt, then this PMI could well join the manufacturing sector in contraction.   Tomorrow, the Caixin PMI data will provide another insight into the more private-sector and export-oriented parts of China's economy.    Non-manufacturing PMI components
Czech National Bank Prepares for Possible Rate Cut in November

Brazil's Central Bank Set to Begin Easing Cycle as FX Markets Shift Focus from US Debt Downgrade

ING Economics ING Economics 02.08.2023 09:26
FX Daily: Brazil set to start its easing cycle Markets were taken aback by Fitch's downgrade of US debt yesterday. EUR/USD rose, but the greenback is enjoying safe-haven demand to the detriment of high-beta currencies. We doubt this will be a long-lasting driver for FX markets and the focus will rapidly shift back to data. In Brazil, the central bank should start cutting rates today: we expect 25bp.   USD: Downgrade unlikely to be long-lasting driver The dollar resilience was untouched by the soft block of data released yesterday, where the ISM manufacturing rebounded less than expected and remained quite deep in contractionary territory, and JOLTS figures showed a bigger than anticipated drop in job openings. Markets are clearly turning a blind eye to second-tier activity figures, and expectations that jobs figures will still be robust this week likely prevented any further dovish repricing in the USD curve, and left other factors (mostly weak data from China) to keep the dollar supported. A surprise development that shook FX markets late in the US session yesterday was the announcement that Fitch downgraded the US from AAA to AA+, with a stable outlook. Fitch mentions the fiscal deterioration over “the next three” years and elevated government debt as the main reasons for the downgrade, which is the first one since 1994. This puts the US fiscal discussion back in scope for investors after the debt ceiling saga was quickly put on the back burner. EUR/USD jumped on the news, but high-beta currencies suffered, and the dollar seems to have been shielded by safe-haven demand. Will this prove to be a driver for the FX market beyond the knee-jerk reaction? We doubt that. Treasury Secretary Janet Yellen described the downgrade as “outdated”, and markets will likely see it in a similar way (i.e. strictly tied to the debt ceiling standoff) especially in a week full of important data releases and with the next Federal Reserve rate hike hanging in the balance. Today, the ADP employment figures are the key highlight on the data front. In July, ADP figures more than doubled consensus estimates (almost 500k) but the official payroll print was a more modest 209k.
De-dollarisation on the Asset Side: Central Bank Reserves and Global Dynamics

De-dollarisation on the Asset Side: Central Bank Reserves and Global Dynamics

ING Economics ING Economics 17.08.2023 09:34
On the asset side, de-dollarisation is seen mainly in the central banks’ international reserves, as the dollar is being pushed out by a variety of currencies including the CNY. At the same time, most of this de-dollarisation took place in the environment of zero interest rates. Given the recent normalisation of monetary policy in the US, the prospects of further de-dollarisation remain to be seen, and in 1Q23 the USD share in allocated reserves went up slightly. For the global private sector, the USD seems to remain just as attractive an international asset, especially in the nonfinancial sector.   Looking at the most tracked IMF COFER data, USD seems to be steadily losing ground as a reserve currency, even adjusted for FX rate movements (Figure 15). In 2022, the pace of de-dollarisation accelerated, and USD holdings were reduced in absolute terms for the first time. However in 2023, that process did not continue and may now be facing obstacles in the form of higher return on USD amid 5%+ Federal Reserve interest rates. One argument partially explaining the drop in the dollar’s share in 2022 could have been the strong dollar prompting heavy FX intervention sales in emerging markets to protect local currencies.   For example, Chile spent about half of its FX reserves defending the peso. This could have meant that the dollar’s share in reserves briefly fell below benchmarks. Looking at the long-term developments, the USD seems to be replaced (Figure 16) mostly by Asian currencies, namely CNY and JPY, but also with European currencies, except CHF. The most noticeable progress is seen in CNY as its share went up from zero in 2015 to 2.6% as of 1Q23. For reference, the renminbi was formally included in the SDR basket in late 2015.     In addition to the structure of FX reserves discussed above, diversification towards gold is often mentioned by the de-dollarisation watchers. The popularity of this topic seems to be growing as gold is more insulated against financial sanctions. Looking at the data (Figures 17 and 18) however, one can see that despite the increase in physical gold in FX reserves in 2014 and 2022 (coinciding with the rounds of Russia’s geopolitical challenges), the overall share of gold in global central bank reserves has increased only modestly and mostly thanks to the increase in its price.  
ECB Signals Rate Hike as ARM Goes Public: Market Insights

Eurozone PMI Data Disappoints as Euro Tests Key Support Against US Dollar

ING Economics ING Economics 24.08.2023 12:28
Eurozone Services PMI falls to 48.3 in August (50.5 expected, 50.9 in July) Eurozone Manufacturing PMI rises to 43.7 in August (42.6 expected, 42.7 in July) Euro testing key support against the US dollar The data from the eurozone was no more promising, particularly Germany – the bloc’s largest economy – which has had a harder year than most and looks likely to continue to do so going into next year. There was a slight and unexpected improvement in the manufacturing number, albeit from a very low base and it still remains deep in contraction territory. But services contracted against expectations and the number was some way below forecasts and the July reading. Interest rate probabilities were pared back in the eurozone this morning too, with traders viewing the meeting in a few weeks as a coin toss between standing pat and another 25 basis point hike. Another hike is far from guaranteed in the cycle and today’s data certainly supports the case for pausing to see what impact past tightening has had.     Is EURUSD heading into bearish territory? The euro has been falling against the greenback for a month or so now, as have many other currencies as the dollar has performed well on the expectation of US rates remaining higher for longer.   EURUSD Daily     It’s now fallen back to a level that could tell us whether traders are viewing this as a corrective pattern or a broader reversal. While that is to a large extent a subjective view, there is a train of thought that when it’s trading above the 200-day simple moving average it’s in bullish territory, and below it’s in bearish territory. It’s worth noting there are many other ways to define it too. The pair is now testing the 200-day SMA from above and this also coincides with the lows from late June and early July. A break of this could be a bearish signal, with the next test coming around the 1.0650-1.07 where the next support level from May coincides with the bottom of the 200/233-day SMA band.
UK PMIs Signal Economic Deceleration, Pound Edges Lower

UK PMIs Signal Economic Deceleration, Pound Edges Lower

Ed Moya Ed Moya 24.08.2023 12:45
UK manufacturing and services PMIs decelerate The British pound has edged lower on Wednesday. In the North American session, GBP/USD is trading at 1.2720, down 0.09%.     UK PMIs head lower The UK economy continues to cool down, and today’s PMI readings showed deceleration in both the manufacturing and services sectors. The Manufacturing PMI eased to 42.5 in August, down from 45.3 and below the consensus estimate of 42.5. The Services PMI disappointed and fell into contraction territory, with a reading of 48.7. This was lower than the July reading of 51.5 and missed the estimate of 50.8. GBP/USD fell over 100 basis points earlier but has recovered these losses. The weak data might not be such bad news as far as the Bank of England is concerned. The battle to curb inflation has not gone all that well, as the UK has the dubious honour of having the highest inflation among G-7 countries. If weakness in the manufacturing and services sectors dampens hiring and weighs on the tight labour markets, inflationary pressures could ease. The Bank of England meets in September and the markets have fully priced in a rate hike, but it’s unclear what will happen after that, with the markets pricing in one more hike before the end of the year. The BoE’s rate path after September will depend heavily on upcoming inflation and employment reports. It has been a light week on the data calendar and investors will be hoping for some interesting comments at the Jackson Hole Symposium which begins on Thursday. The Fed and other major central banks are expected to wind up their rate-tightening cycles and Jackson Hole has often served as a venue for announcing shifts in policy. Fed Chair Powell has insisted that the fight against inflation is not done, with inflation still above the 2% target. There is talk in the markets of the Fed trimming rates next year, but I would be surprised if Powell mentions rate cuts in his speech on Friday.   GBP/USD Technical GBP/USD pushed below support at 1.2714 and 1.2641 before rebounding higher  There is resistance at 1.2812 and 1.2885    
AUD: RBA Maintains Rates as New Governor Upholds Continuity

Asia Morning Bites: Tokyo Inflation Dips and Markets Await Powell's Jackson Hole Speech

ING Economics ING Economics 25.08.2023 09:03
Asia Morning Bites Tokyo inflation for August dips slightly on base effects. Asian markets await the outcome of Powell's Jackson Hole speech.   Global Macro and Markets Global markets:  Pre-speech nerves? US equities reversed Wednesday’s gains on Thursday. The S&P 500 dropped by 1.35% while the NASDAQ fell 1.87%. Equity futures are non-committal ahead of Powell’s speech today.  Chinese stocks put in a rare up-day on Thursday. The CSI 300 rose 0.73%, and the Hang Seng index rose 2.05%, though this may have been following the earlier US lead, and could reverse today. US Treasury yields moved a little higher yesterday after Wednesday’s large falls. The 2Y yield is back above 5% now at 5.023%, while the 10Y yield regained 4.5bp to reach 4.237%. That’s still about 13 bp off the recent high.  The increase in yields was enough to push the USD stronger against the G-10 currencies yesterday, and EURUSD is now down to 1.0799. The AUD reversed all of Wednesday’s gains falling to 0.6415, Cable has dropped below 1.26 and the JPY is back up again to just under 146. In Asia, the KRW benefited from the BoK’s hawkish pause, and has gapped down more than a per cent to 1322.35. The TWD was also among the gainers, moving down to 31.786. The VND was weaker again yesterday, rising to 24008 as it looks to recalibrate against the CNY against which it has appreciated this year. The CNY was roughly unchanged on the day at just under 7.28.   G-7 macro:  Today’s Powell speech will get a great deal of scrutiny and there has already been a lot written about what he will say, with the majority view being that he will tread a cautious path with respect to any further potential tightening, looking for confirmation from the totality of the data before committing to any additional hikes. Lots of comparisons to the Greenspan “risk management” era are being wheeled out. At the same time, the Fed pundits are also saying that he will not want to suggest that there is any pre-set path for easing. We will know soon enough how well markets take his comments. The fact that this speech is scripted, and there is no Q&A means that room for going "off-piste" is limited. Besides this, and all the other Fed speakers this weekend, the University of Michigan publishes its August consumer confidence and inflation expectations surveys. Sentiment has been picking up recently, while the inflation expectations numbers have eased back slightly. Yesterday’s data was mixed. Weaker durable goods figures but lower jobless claims.   Japan: Tokyo inflation eased to 2.9% YoY in August (vs 3.2% July, 3.0% market consensus) mainly due to base effects and lower energy prices. Utility prices dropped to -15.0%YoY from the previous month’s -10.8%. However, core inflation excluding fresh food and energy stayed at 4.0%YoY as expected for the second month, the highest level for decades. Demand side pressures are clearly building up, suggested by inflation increases in entertainment (5.7%), transport & communication (3.6%), and medical care (2.8%). On a monthly comparison, goods prices dropped -0.1% MoM sa while services prices stayed flat. Also, higher than expected PPI services inflation (1.7% YoY in July vs revised 1.4% June, 1.3% market consensus) also reinforced the same message.   There are risks on both sides in the near future. On the downside, entertainment price pressures will be partially reduced as the summer holiday season ends. On the upside: The energy subsidy program will come to an end by September; Recent renewed JPY weakness; and rises in pipeline service prices. We believe that upward pressures will likely build a bit more significantly at least for the next few months and push up inflation again. We think inflation will exceed the BoJ’s outlook for this year and next year and core inflation excluding fresh food and energy will likely stay in the 3% range by the end of this year.   Singapore:  July industrial production is set for release today.  We expect another month of contraction, tracing the struggles faced by non-oil domestic exports, which were down 20.2%YoY for the same month.  We can expect industrial production to stay subdued until we see a turn in NODX, which should also weigh on 3Q growth.   What to look out for: Jackson Hole conference Malaysia CPI inflation (25 August) Singapore industrial production (25 August) US Univ of Michigan Sentiment (25 August)
Understanding the Factors Keeping Market Rates Under Upward Pressure

UK Yields Fall Amid Economic Uncertainty as BoE Considers Further Rate Hikes

Craig Erlam Craig Erlam 25.08.2023 09:34
UK yields fall amid economic uncertainty BoE expected to raise rates twice more this year to 5.75% Cable testing key support for a second day   The pound is on the decline again on Thursday, having fallen over the last couple of days on the back of some worrying economic figures from the UK. Whether we’re talking about a blip in the data or cracks finally appearing in the economy after a very aggressive tightening cycle from the Bank of England, traders are paring back expectations for interest rates once more. We’re seeing UK 10-year bonds rising today (yields falling) which goes against the trend we’re seeing across Europe, the US, and Japan, for example. Two more hikes are still priced in over the coming months but that could be pared back further if the data continues on the same path, especially if we see some better wage numbers following the spike in the three months to June. That weakness in the pound may be helping the FTSE to outperform today, with it being one of the only European indices still in the green after early gains – seemingly driven by knockout earnings from Nvidia – fizzled out over the course of the day.   Fourth time’s a charm? The pound has fallen close to 1.26 on three other occasions so far this month, each time falling a little short somewhere between 1.2610 and 1.2620 before rebounding higher.   The least convincing of these rebounds came yesterday, with the price once again trending down today to once again come close to those prior lows. The difference so far today is there’s no sign of a recovery and, at the time of writing, the price remains below the 55/89-day simple moving average band. On each of the last three occasions, the price closed back within here or higher. A close below here would be the first since March and if accompanied by a new two-month low and break of 1.26, could be a very bearish signal for cable. Of course, with Jackson Hole underway, there’ll be a lot of central bank speak over the next couple of days which could sway this one way or another which is worth bearing in mind. But right now, the pair is looking under some pressure.    
Global Economic Data and Central Bank Activity: Key Focus Areas for the Upcoming Week"

Global Economic Data and Central Bank Activity: Key Focus Areas for the Upcoming Week"

Ed Moya Ed Moya 28.08.2023 09:20
US Now that we heard from Fed Chair Powell at the Kansas City Fed’s Jackson Hole Symposium, the focus shifts back to the data. This week is filled with data that will outline how quickly the economy is weakening. Consumer data will show personal income growth is not keeping up with spending, while confidence holds steady. The Fed’s favorite inflation reading is also expected to show subdued growth is holding steady on a monthly basis. Friday’s NFP report will show private sector hiring is cooling.    Over the weekend, the spotlight will be on US-China relations.  US Commerce Secretary Gina Raimondo will meet with Chinese officials, striving to lower tensions between the world’s two largest economies.  The week will also be filled with Fed speak.  On Monday and Tuesday, Barr speaks about banking services. On Thursday, we hear from both Bostic and Collins, while Friday contains appearances by Bostic, a couple of hours before the NFP report, and Mester on inflation later in the morning.   Eurozone Next week is data-heavy but there are a few releases that stand out. The most notable is the HICP flash estimate for the eurozone on Thursday which is expected to drop slightly at the headline and core levels. There will be individual country releases in the days running up to this which may signal whether Thursday’s data will likely beat or fall short of expectations. ECB accounts are also released on Thursday which will be of interest considering markets now view the rate decision at the next meeting as a coin toss between 25 basis points and no change.    UK  The week starts with a bank holiday and it doesn’t get much more exciting from there. There are a few tier-three data releases and Huw Pill from the Bank of England will make appearances on Thursday and Friday. Russia A selection of economic data is on offer next week including unemployment on Wednesday, GDP on Thursday, and the manufacturing PMI on Friday.  South Africa No major events next week with PPI on Thursday the only notable release. It follows CPI data this past week which fell to 4.8%, well within the SARB 3-6% target range, following a much lower 0.9% monthly reading in July.  Turkey The CBRT surprised markets last week by hiking rates far more aggressively than expected, taking the repo rate to 25%, up from 17.5%. The move may cost people at the central bank their jobs if history is anything to go by, with President Erdogan openly no fan of higher rates. That said, he did employ these people shortly after his election victory so perhaps with that behind him, he may be more open to it while remaining vocally against. This week offers very little, with GDP on Thursday the only release of note. Switzerland Inflation data on Friday is expected to show prices rising 1.5% on an annual basis, slightly lower than in July and well below the SNB 2% target. The central bank hasn’t appeared satisfied though and markets are fully pricing in a hike in September, with 32% chance of it being 50 basis points. The manufacturing PMI will also be released on Friday, with retail sales on Thursday, and the KoF economic barometer and economic expectations on Wednesday. China Only three key economic releases to monitor for the coming week. First up, the NBS manufacturing and services PMIs for August will be out on Thursday. Another contractionary print of 49.5 is expected for the manufacturing sector, almost unchanged from July’s reading of 49.5. If it turns out as expected, it will be the fifth consecutive month of negative growth for manufacturing activities as China grapples with a weak external environment and domestic financial contagion risk that has been triggered by debt-laden property developers. Secondly, the NBS services PMI for August is forecasted to remain surprisingly resilient at 51, almost unchanged from 51.5 in July. The services sector is still in an expansionary mode albeit at a slower pace that is likely being supported by domestic tourism. Thirdly, the private sector-focused Caixin manufacturing PMI for August which consists of small and medium enterprises will be released on Friday, 1 September. Consensus is still expecting a contractionary reading of 49.5, almost unchanged from July’s print of 49.2. If it turns out as expected, it will be the second consecutive month of negative growth. A slew of key earnings releases to take note of starting this Saturday, 26 August will be China Merchants Bank, and Bank of Communications followed by; BYD (Monday, 28 August), Ping An Insurance, NIO, Country Garden (Tuesday, 29 August), Agricultural Bank of China (Wednesday, 30 August), ICBC, Bank of China, China Minsheng Bank (Thursday, 31 August). Also, market participants will be on the lookout for fiscal stimulus measures to defuse the $23 trillion debt bomb owed by local governments, financial affiliates, and property developers. On Friday, 25 August, China policymakers unveiled a further easing of its home mortgage policies that scrap a rule that disqualifies first-time homebuyers who had a mortgage that is fully repaid from being considered a first-time buyer in major cities in an attempt to boost up residential property transactions.  India Two key data to focus on. Q2 GDP on Thursday where the consensus is expecting a further economic growth expansion to 7% y/y in Q2, a further acceleration from 6.1% y/y recorded in Q1. Lastly, the manufacturing PMI for August will be released on Friday where it is being forecasted to come in at 57, almost unchanged from the July reading of 57.7 which will indicate a 26th straight month of growth expansion for manufacturing activities. Australia Retail sales for July will be out on Monday, with a recovery to 0.3% m/m from -0.8% m/m in June. On Wednesday, the important monthly CPI indicator for July will be out and the consensus forecast is another month of cooling to 5.2% from 5.4% in June. If it turns out as expected, RBA may have more reasons to justify its current pause at 4.1% for two consecutive meetings. Its next monetary policy meeting will be on 5 September, and as of 24 August, the ASX 30-day interbank cash rate futures have priced in a 12% chance of a rate cut to 3.85% (25 bps cut).  New Zealand A quiet week with the only focus on the ANZ business confidence indicator for August on Thursday followed by ANZ consumer confidence for August on Friday. Japan The action comes mid-week. Consumer confidence for August is released on Wednesday and is expected to be almost the same at 37.2 versus July’s 37.1. On Thursday, we will have retail sales and industrial production for July. Growth in retail sales is expected to slip slightly to 5.4% y/y from 5.9% in June. Meanwhile, industrial production is expected to contract to -1.4% m/m from 2.4% m/m in June, and -0.7% y/y is forecasted from 0% y/y recorded in June. Singapore The sole key data to monitor will be the producer prices index for July out on Tuesday with another month of negative growth forecasted at -9% y/y, a slower pace of contraction from -14.3% recorded in June. It would be the 7th consecutive month of decline.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Kenny Fisher Kenny Fisher 30.08.2023 13:27
Germany to release CPI on Wednesday, Eurozone on Thursday US consumer confidence and jobs data disappoint   The euro’s mini-rally has run out of steam. EUR/USD climbed 0.80% over the past two days but is trading in negative territory on Wednesday. In the European session, the euro is trading at 1.0867, down 0.11%. The markets will be keeping a close eye on European inflation releases today and Thursday. Germany releases the July CPI report later today, with a consensus estimate of 6.0%, compared to 6.2% in July. The once-formidable German juggernaut is in trouble and inflation remains high. The eurozone releases July CPI on Thursday, which is expected to drop from 5.3% to 5.1%. The ECB meets next on September 14th and ECB President Lagarde may have signalled that another rate hike is coming. Lagarde attended the Jackson Hole summit last week and said that interest rates would remain high “as long as necessary” in order to bring inflation back to the ECB’s 2% target. Lagarde’s hawkish remarks were more hawkish than her comments at the July meeting, where she said that ECB policy makers had an “open mind” about the September decision.   There’s no arguing that eurozone inflation remains too high, but the argument against raising rates even higher is that the eurozone economy is not in great shape, and nine straight rate hikes from the ECB have cooled economic growth. Further hikes could tip the economy into a recession, which means that the ECB has its work cut out in deciding whether to raise rates again or take a pause in September. The Federal Reserve is widely expected to hold rates at next week’s meeting, and disappointing data on Tuesday may have cemented a pause. The Conference Board Consumer Confidence Index fell sharply to 106.1 in July, compared to 116.0 in August, marking a two-year low. As well, JOLTS Job Openings slowed to 8.82 million in July, down from 9.16 million in June and well off the estimate of 9.46 million. This was the sixth decline in the past seven months, a sign that the resilient US labour market is showing cracks.   EUR/USD Technical EUR/USD is putting strong pressure on resistance at 1.0896. The next resistance line is 1.0996 1.0831 and 1.0731 are providing support    
Gold Trading Analysis: Technical Signals and Price Movements

Gold Trading Analysis: Technical Signals and Price Movements

InstaForex Analysis InstaForex Analysis 30.08.2023 13:31
Early in the European session, gold is trading around 1,936.52, below the high reached at 1,938.13, and below 4/8 Murray. Yesterday, the US consumer confidence data showed a worsening of sentiment. This survey displayed concerns among consumers about the prices of groceries and gasoline in particular. This negative data for the US dollar affected Treasury yields which caused a strong rally in gold, breaking the 200 EMA located at 1,925.     According to the 4-hour chart, we can see that gold is trading within an uptrend channel. It is expected to continue moving there until it reaches the daily resistance zone located at 1,943. According to the 4-hour chart, we can see that the Eagle indicator reached the 95-point area which signals an imminent technical correction. It is likely to happen in the next few hours if XAU/USD falls below 4/8 Murray. The metal could reach the 200 EMA located at 1,925 and could even drop as low as 3/8 Murray at 1,921.   Given that the trend remains bullish, we could expect a rally in the next few hours and gold could continue its rise. In case of a break above 1,945, gold could reach 5/8 Murray located at 1,953. This level could serve as a strong rejection. Up to that level, the instrument is considered overbought which could also be seen as a clear signal to sell. On the other hand, if gold falls below 1,937 (4/8 Murray), we could see a clear signal to sell which will give us an opportunity to take profits around the bottom of the uptrend channel located at 1,917. The daily pivot point is located at 1,930.   If gold trades around this price level of 1,930, we could expect an accumulation or consolidation in the next few hours. Below 1,930, we could see a clear signal to sell. Conversely, above this level, a technical bounce could be triggered. Our trading plan for the next few hours is to sell gold below 1,937. In case there is a pullback around 1,943, we could sell with the target at 1,920. The Eagle indicator is in an overbought zone which supports our bearish strategy.  
Peer Valuation: Toya's Position Among Global Power and Hand Tool Producers

Analysis and Projections for Non-Residential Construction in the European Union: 2021-2025

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 08.09.2023 15:18
The years 2021 and 2022 were also good in the European Union, in which we observed a significant increase in the useful area of non-residential buildings in the issued permits and notifications clearly above the level of 170 million m2 . In 2022, however, we were dealing with a decrease by 1.1% compared to 2021. Eurostat has not yet collected data for all EU countries for the first half of 2023, but data from Q1'2023 show a decrease of over 2% y/y.   We expect a slight slowdown in the value of orders in the second half of 2023/24 and in the 2024/25 financial year. We see a risk that the slowing economy will have a negative impact on the number of commenced constructions of cubature facilities. This should translate into orders for Mercor products with a delay, but the scale of the slowdown should not be large.   We estimate that sales revenue in 2023/24e will amount to PLN 643mn (+2.3% y/y), and in the following year it will decrease by 3.6% y/y to PLN 620mn. In the following years, we assume an increase in sales, but at a rather conservative level. We assume a 6-year CAGR (2022/23 – 2028/29e) of the value of orders and revenues at the level of 2.9% and 2.2%, respectively. Mercor looks decent in terms of gross profit margin on sales, which oscillated at around 25%. 1Q'2023/24 was slightly worse than 1Q'2022/23, gross profit margin decreased from 27.5% in 1Q'2022/23 to 25.4%, which may be a sign of deterioration of margins in the near future. In our forecast, we assume a decline in gross profit margin from 24.9% in 2022/23 to around 23% in the next two years. After this period, we assume an increase in the margin along with the expected improvement in the economic situation in the industry
Recent Economic Developments and Upcoming Events in the UK, EU, Eurozone, and US

Recent Economic Developments and Upcoming Events in the UK, EU, Eurozone, and US

FXMAG Team FXMAG Team 14.09.2023 08:56
Economic data, news & events ■ UK: Monthly GDP contracted by 0.5% mom in July, reversing the rise of 0.5% in the prior month. The main downward contribution came from services, where output fell 0.5% mom in July. Within services, the largest downward contribution came from healthcare activity, where industrial action increased. But there were also falls in industrial production and construction in July. Monthly GDP has been particularly volatile recently due to: 1. an additional bank holiday in May; 2. exceptionally warm weather in June, which boosted hospitality, tourism and construction; and 3. Industrial strike action. Looking instead at the less volatile 3M/3M growth rate, GDP rose 0.2% in July, unchanged from June. We continue to expect the economy to enter a recession around the turn of the year. ■ EU: Today, European Commission President von der Leyen will deliver her speech on the State of the Union 2023 during the European Parliament plenary session in Strasbourg. She is expected to outline the main priorities and flagship initiatives for the year to come, based on the EU’s achievements of the past years (9:00 CET). ■ Eurozone: We forecast a 0.7% mom decline in industrial output for July, following a contraction of 1% qoq in 2Q23. The expected contraction will have come about in a difficult environment for the industrial sector, which faces weak global demand for goods and fading support from backlogs of orders. The latest surveys of industrial activity do not point to a turnaround any time soon. The manufacturing PMI and its gauges of output and new orders remain stuck far below the expansion threshold (11:00 CET). ■ US: Headline monthly CPI inflation likely jumped to 0.6% mom in August, from 0.2% mom in July. In yearly terms, CPI inflation likely rose to 3.6%, from 3.2%. Such an acceleration was likely entirely driven by energy prices, as we estimate that gasoline prices rose by around 10% mom in seasonally adjusted terms and utility (piped) gas prices probably followed wholesale prices higher. Core inflation, on the other hand, is likely to come in at 0.2% mom for a third consecutive month, taking the yoy rate down to 4.4% from 4.7% in the prior month. We expect the disinflation process continued in housing, while inflation for core-goods and for non-housing core services (referred to as supercore) likely continued to moderate (14:30 CET).
Rates Steepen as Fed's Upgraded Dot Plot Takes Hold: 10-Year Yields Hit 16-Year High

Rates Steepen as Fed's Upgraded Dot Plot Takes Hold: 10-Year Yields Hit 16-Year High

ING Economics ING Economics 26.09.2023 14:44
Rates Spark: Steepening from the back end The steepening via the back end has resumed as the Fed's upgraded dot plot sinks in. Even if the market does not fully embrace the Fed's view, the current discount for the Fed funds trough is high enough to justify 10Y yields of 4.5% and higher. EUR curve steepened from both ends, but today's German funding update may put the focus on the Bund asset swap spread.   The back end remains in the lead, in the US... Bear steepening of curves resumed at the start of this week with the 10Y UST climbing  above 4.5%. As this marks the highest yield level in 16 years, the closer guideposts are relative valuations. The 2s10s curve for instance has just straddled -60bp, but we have seen range-bound levels for some time around -50bp post March this year. We would argue a key relative metric is where the 10Y stands in relation to the trough of the discounted Fed funds trajectory, essentially the Fed’s landing zone. If that stays around 4% then longer rates at 4.5% or even higher do not look out of whack. The Fed’s key message last week was the shift higher in the fed funds rate projection. Even at the front end this change still has to sink in to a degree with the market discount of around 75bp still higher than the Fed’s 50bp. Of course this is all premised on nothing breaking in the meantime and data largely holding its poise. Therefore some scepticism seems only natural, but we have argued that it’s the long end that has more room to adjust relative to the given front end discount. Which is why data in the wake of the central bank meetings will remain key, and this week has quite a bit to offer. Foremost the personal income and spending data later this week, but also alongside the Fed’s preferred inflation measure, the PCE deflator. Here our economist does see the risk of the monthly reading ticking higher again, similar to the upside surprise in the prior CPI release.    
National Bank of Romania Maintains Rates, Eyes Inflation Outlook

Bank of England Pushes Back Against Rate Cut Expectations Amidst Market Repricing

ING Economics ING Economics 12.12.2023 14:22
UK: Bank of England to offer push back against rising tide of rate cut expectations Financial markets are rapidly throwing in the towel on the “higher for longer” narrative that central banks have been pushing hard upon for months. Admittedly so far, that market repricing has been less aggressive for the Bank of England. But with three rate cuts now priced for 2024, the Bank of England is starting to sound the alarm. Governor Andrew Bailey said in recent days that he is pushing back “against assumptions that we're talking about cutting interest rates". Those comments followed a firming up of the Bank’s forward guidance back in November, where it said it expected rates to stay restrictive for “an extended period”. Expect that narrative to be reiterated on Thursday. A 6-3 vote in favour of no change in rates is our base case, and that matches the vote split from November. Could the Bank go further still and formally say that markets are overpricing 2024 easing in the statement? It hasn’t commented in this way since November 2022, in what was then a stressed market environment. We doubt they’ll do something similar this month. Policymakers may be uneasy about the recent repricing of UK rate expectations, but central banks globally have learned the hard way over the last couple of years that trying to predict and commit to future policy, with relative certainty, is a fool's game. The Bank will also be gratified that the data is at least starting to go in the right direction. Services inflation came in below the Bank’s most recent forecast. Markets may be right to assume that the BoE will be a little later to fire the starting gun on rate cuts than its European neighbours. But when the rate cuts start, we think the BoE’s easing cycle will ultimately prove more aggressive. We expect 100bp of rate cuts from August next year, and another 100bp in 2025.
Unraveling the Dollar Rally: Assessing the Factors Behind the Surprising Rebound and Market Dynamics

Fed's Surprise: Three Rate Cuts in 2024 Propel Dow to Record Highs

Kenny Fisher Kenny Fisher 14.12.2023 14:36
Fed signals three rate cuts in 2024 ECB and BoE to announce decisions shortly Dow hits record highs after the Fed The most hotly anticipated central bank meeting of the year did not disappoint on Wednesday, with the Fed potentially delivering this year’s Santa rally. I don’t think many will have expected the Fed to go as far as it did in forecasting three rate cuts next year only three months after suggesting the tightening cycle is not over. But clearly, it’s not just investors that have been impressed with the data we’ve seen so far in the fourth quarter and now they’re getting more carried away than before. There’s been a lot of debate in recent weeks about whether investors are getting ahead of themselves, too optimistic about how quickly the Fed will cut rates but the message from the central bank is that is not the case. And in typical fashion, investors have now gone further, pricing in six rate cuts next year starting in March. That’s also forced investors to reassess whether they’re in fact too pessimistic with other central banks too, with the ECB now expected to cut rates by 150 basis points over the next 12 months and the BoE between 100 and 125 basis points. Both now have a lot to live up to today and Christine Lagarde, in particular, may not be thanking her US counterparts for whipping investors up into a frenzy right before their announcement and press conference. A repeat performance from the ECB could leave investors going into the end of the year in a much more festive mood.   New record highs in the Dow Markets got an early festive treat from the Fed, with the Dow hitting fresh record highs on the back of the Fed announcement almost two years after it last achieved that feat. US30 Daily Source – OANDA Now that it’s in uncharted territory, momentum indicators will be much more useful as we don’t have past levels to look to. And we are seeing some sign of exhaustion occurring in the MACD histogram, although not yet in the moving averages or stochastic.    
Federal Reserve's Stance: Holding Rates Steady Amidst Market Expectations, with a Cautionary Tone on Overly Aggressive Rate Cut Pricings

BoJ Policy Announcement: Yen's Fate Hangs in the Balance

ING Economics ING Economics 18.12.2023 13:53
JPY: Big swings in sight as BoJ announces policy The Bank of Japan has started its two-day meeting, with the announcement due early in the morning tomorrow (London time). Bank officials have already tempered rate hike expectations for this month by saying such a move is still premature. Still, with investors now actively betting on the end of negative rates in January, the language at this meeting will be key for the short-term performance of the yen. Governor Kazuo Ueda (pictured) is facing the options of either keeping the message broadly unchanged and disappointing the market’s hawkish expectations or offering hints about the state of the discussion on a rate hike and potentially suggesting a tentative timing. The good performance of the yen recently as global rates declined is surely taking off some pressure, but data is starting to prove increasingly inconsistent with the ultra-dovish stance of the BoJ. Our economist is still leaning toward 2Q24 for the first hike, and if that is the preference of the BoJ as well, then it may be too early for a real change in the dovish message later, and the yen risks a downward correction. However, the chances of a hike in January when new economic projections are released are non-negligible and depend on data as well as on JPY performance. Expect any hawkish surprise in communication tomorrow to push USD/JPY close to the 140 support, whereas an unchanged message can bring the pair back to 145, where we could see selling interest if the dollar momentum proves soft.
All Eyes on US Inflation: Impact on Rate Expectations and Market Sentiment

Rates Spark: Evaluating the Near-Term Risks and Expectations for Higher Rates

ING Economics ING Economics 25.01.2024 12:27
Rates Spark: Near-term balance of risks still tilted towards higher rates Markets are geared for dovish outcomes this week, not just in rates where still notable probabilities are discounted for first cuts as early as March, but also across wider risk markets. This sets up markets for disppointments if they don't get exactly what they want. Data is a wild card, but the ECB will have this in mind if it is earnest about pushback.   Near-term balance of risks still tilted towards higher rates The thought of a soft landing actually materialising against all odds are supporting risk assets in all corners of the market. The S&P 500 closed at new record levels on Friday and also on Monday the equities rally pushed on through. In rates the pricing in of a soft landing has pushed down rates along the curve at the start of the week, supported by the idea that inflation is coming down as markets are eyeing this week’s PCE data. But markets are starting to fine-tune their expectations more in line with our thinking, even if we see more scope for correction in this direction: pricing for a March Fed cut is now down to 10bp, even though overall pricing for cuts this year has even deepened somewhat again to 134bp. Even though we also see inflation coming down steadily, we warrant caution about markets still getting ahead of themselves – especially in EUR rates. The European Central Bank will meet on Thursday and we expect a reiteration of their data-dependent path towards policy normalisation. Last week yields came down the day that Lagarde hinted at rate cuts in the summer. The best that markets can hope for is a reiteration of that comment, but given the guarded fashion of Lagarde’s statements we can see a scenario where she does not repeat this dovish message in the context of the policy meeting this week. We therefore see a chance that EUR 2Y rates will recalibrate higher again in response to the press conference when markets don’t get exactly what they are looking for. In the US there is also no guarantee that the nudge lower in rates we saw at the start of this week will extend. Markets have their eyes on a 2.0% core PCE inflation, in line with the Fed’s mandate that will be published on Thursday, which, if met, would keep the market pricing of a March rate cut as a realistic scenario. If, on the other hand, the actual number were to exceed 2.0%, even by a bit, we could imagine the market reacting more sensitively to such a disappointment. Similarly, we would expect an asymmetric reaction to the GDP growth figures, which our economist expects to come in firm on Thursday. On balance, if data come in as expected the further downside is moderate, but at least near term the potential could still be larger.   Tuesday's events and market views Japan will kick-off this week's central bank meetings but no change of the policy rate is expected. In terms of economic data releases Tuesday will be another light day. The EU Commission will publish the consumer confidence index and the ECB will release results of its bank lending survey. In the US we a few business indicators from regional Feds. It is the rest of the week will be of more interest, with eurozone PMIs on Wednesday, the ECB meeting and US GDP data on Thursday followed by the PCE on Friday. In primary markets Germany will sell 4Y and 30Y green bonds while the Netherlands taps a 15Y bond. The US Treasury sells new 2Y notes. In SSAs the EU has mandated syndicated taps of existing 7Y and 30Y bonds, which should also be Tuesday’s business.

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