USD longs lurched higher, EUR shorts surged - Rabobank

Research Team at Rabobank lists down the IMM net speculators’ positioning as at 7 March, 2017

Key Quotes

“USD longs lurched higher to their best levels since early January as the markets priced in expectations of a Federal Reserve interest rate hike on March 15. The fact that longs remain below the levels registered after last November’s US elections suggests disappointment over the pace of President Trump’s fiscal spending and potentially some concern about the impact of isolationist policies on growth.”

“EUR shorts jumped higher again last week to reach their strongest level since mid- January. The less dovish tone of the ECB at last week’s post policy meeting press conference suggests shorts could drop in the next set of data.”

“Having fallen for nine consecutive weeks, JPY shorts increased ahead of this week’s BoJ policy meeting. Concerns regarding a drop in world trade stemming from US isolationism, tension in the S.China Sea and concerns about the N.Korea have all been supportive JPY factors.”

“Bearish bets against the pound jumped as the start of the Brexit process approached. PM May is reportedly looking to trigger Article 50 of the Lisbon Treaty as soon as this week. This will initiate the start of what could be a period of difficult negotiations between the UK and the EU.”

“CHF shorts edged a little lower last week potentially on the back of some reduction in tensions ahead of the French Presidential election.”

“CAD longs edged lower last week as oil prices came under pressure. The better tone of Canadian economic data, however, should offer some support. AUD long positions also fell. In the spot market the AUD has lost the upside momentum noted earlier in the year as commodity prices drop back.”