Weekly COT Report: Sterling Bears Unloaded Shorts Ahead Of UK Election
Matt Simpson December 16, 2019 3:05 AM
A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.
As of Tuesday 10th December:
- Large speculators reduced net-long exposure to USD by -$1.6 billion to $18.2 billion.
- On the DXY, traders are their least bullish since July 2018
- Minor weekly changes to net positioning overall. GBP saw the largest, with short exposure falling -7.4k contracts ahead of the UK election.
- Trader were their most bearish on the Swiss franc in 6-months. Whilst yen traders slightly reduced bearish exposure last week, net-short exposure remains near a 6-month high
USD: Whilst still net-long, bullish exposure on the USD has remain subdued and effectively range bound between +10 to +20 billion since July. This is neither a compelling bullish or bearish case, so perhaps we’ll continue to see DXY chop around in ranges until a more divergent theme appears next year between the US and ROW (rest of world).
GBP: Gross longs reached their highest level since April, ahead of Friday’s UK election which saw net-short exposure at its least bearish level since May. Given the 2% rally at the exit polls, we wouldn’t be too surprised to see traders stitch to net-long in this week’s report (whilst data is released on Friday, the report is compiled on Tuesday)
As of Tuesday 10th December:
- Whilst gold bugs saw a slight reduction in bullish exposure, bears remain side lined and account for just 16.9% of all contracts traded
- Bearish exposure on copper is at its lowest level since May, adding weight to the argument for a bullish breakout
- Traders were their most bullish on platinum since August 2016
Copper: Gross shorts have been trending lower since August and, whilst early days, we saw a slight pickup with gross longs last week. Last week’s high saw copper futures trade at their highest level since May, although Friday’s bearish engulfing candle warns of near-term weakness and likely mean reversion. Sill, we’ll see if its upswing since September’s low can push higher over the coming weeks.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.