USD and JPY longs edged lower - Rabobank

Research Team at Rabobank, lists down the IMM net speculators’ positioning as at 17 May 2016.

Key Quotes

“Following an eight week run of reducing net shorts, speculators increased their negative holding of EURs modestly last week. That said, shorts stand at just 12% of their December high and last week they reached their lowest level since May 2014 before the ECB initially cut its discount rate into negative territory.

Net USD longs edged lower having popped higher the previous week. Positions at the start of the May dropped to their lowest since June 2014 just prior to the sharp increase in USD buying in H2 2014.

JPY longs edged lower for a fourth consecutive week as the MoF continued to warn of a policy reaction to yen strength. Net speculators’ longs recently reached multi year highs.

Net sterling shorts dropped to their lowest level since early April. In recent weeks they climbed to their highest point since June 2013. GBP remains vulnerable to political uncertainty ahead of the June 23 referendum on EU membership though opinion polls are currently favouring the ‘remain’ camp which should reduce political uncertainty and support the pound.

Net CHF long positions edged lower signaling an improvement in risk appetite. Last month they moved to their strongest levels since June 2015 despite the SNB’s reiteration of its threat that it could intervene to offset demand for the CHF.

Net AUD longs continued to drop in reaction to the RBA’s surprise rate cut and weaker inflation projections. CAD net positions moved lower in response to economic uncertainty connected with the impact of wildfires on oil output.”