Investing Archives - Page 10 of 80

CFTC: Overall Gross Short Positions Reduced

The most extreme speculative positioning, judging from the futures market is the long yen position. The bulls added another 3.4k contracts, lifting the gross long position to 82.8k contracts. The record was set in 2008 at 94.7k contracts.

The gross short position was trimmed by 4.5k contracts, leaving 29.5k. It is the smallest gross short position since before Abe was elected in Prime Minister in 2012. The net long yen speculative position rose to 53.3k contracts. The record was also set in 2008 at 65.9k contracts.

U.S. Dollar Bounces Following Post-Central Bank Meeting Drops

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction. It was helped by widening interest rate differentials. Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note. With new orders rising, it is reasonable to expect the momentum to carry into Q2.

Could the U.S. Dollar be Bottoming Against the Loonie?

We have been looking for a bottom in the US dollar against the Canadian dollar. It is been difficult, but now it appears that the technicals are turning. This Great Graphic, from Bloomberg, shows that the US dollar is moving above a trend line down off the January 20 high just below CAD1.47.

Is the Idea of ‘Local Currencies’ a Good One?

Helicopter money is the rage. Central banks are talking about it. Economists are debating it. The media is rife with coverage. While it sounds important, it is not precisely clear what helicopter money means.

Sterling Traders Heading for the Br(exit)

The UK referendum is three months away. Three-month options are a common benchmark for various market segments from speculators, to fund managers to corporations. Events over the past week have raised the risks that the UK votes to leave the EU.

Using Breakevens over Spreads

Until last September, the Federal Reserve seemed to play down the market-based measures of inflation expectations, preferring the surveys that showed views were anchored. At the September 2015 FOMC meeting where the Fed had been expected to tighten until the August turmoil, officials cited among other considerations, the decline in market-based measures of inflation expectations.

CFTC: Long Sterling Clearly in Vogue Last Week

After a relatively quiet period into the run-up to the ECB, speculative activity markedly increased in the CFTC reporting week ending the day prior to the conclusion of the FOMC meeting.

The Unlikelihood of ‘Secret’ Currency Meetings

In our work, we have argued that the dollar is having its third significant rally since the end of Bretton Woods. The first rally was associated with Reagan though it began under Carter and followed 100 bp hike by a new Federal Reserve Chairman (Volcker).

On a real broad trade-weighted basis, the dollar appreciated by more than 50% over the seven years and in 1985, the G7 met at the Plaza Hotel in NY and agreed to coordinate intervention to drive the dollar lower.

Do You Believe the Dollar has Peaked?

The cry that the dollar has peaked is gaining ground. We are not convinced. The macro-fundamental case remains intact. Divergence between the US and other high-income countries continues, even if at a more gradual pace than the Federal Reserve expected a few months ago.

Speculators’ Position Adjustments Were Small Ahead of the ECB

The Commitment of Traders reporting period ending March 8 showed little position adjusting ahead of the ECB meeting two days later. A little more than 3/4 of the gross positions we track saw less than 5k contract change and only two were above 6k.

The gross long speculative sterling position was cut by a quarter or 9.6k contracts to 29.4k. Speculators also built a larger gross long Australian dollar position, adding 9.7k contracts to 86.1k.