Traders have made their views on the euro and the underlying economy quite apparent, with net-short exposure falling to its most bearish level since March 2020.
Whilst traders remain heavily net-short Japanese yen futures, we’ve taken note that gross longs have risen to their highest level since March 2021.
Commitment of traders – as of Tuesday 19th of July:
- Net-short exposure to euro futures increased by 17.5k contracts
- Outside of the euro, weekly adjustments were only minor among FX majors (+/- 3k)
- Gross longs on JPY futures rose to their highest level since March 2021
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Japanese yen futures (JPY):
Traders have been net-short yen futures since March 2021. However, it is worth noting that gross longs are now at their highest level since March 2021. Admittedly we also saw a slight increase of gross-shorts these past few weeks, but these could be the early indications of a shift in sentiment towards a potentially oversold Japanese yen. So this is a trend will we continue to monitor in due course.
Commitment of traders – as of Tuesday 19th of July:
- Large speculators were their least bullish on gold since June 2019
- Net-short exposure to copper fell for a second week, although traders closed both longs and shorts
- Large speculators were on the cusp of reverting to net-short silver futures and are net-long by just 1.4k contracts
Gold futures (GC):
Gold remains to be unloved by large speculators, as net-long exposure has fallen to its least bullish level since June 2019. Managed funds however, have been net-short for 2-weeks already. We seem to be in the phase where concerns of a recession is forcing some to liquidate, yet it could finally become a safe-haven if or when a recession is confirmed. And we’re clearly not there yet, so bears retain control overall for now.
Silver futures (SI):
Large speculators are closer to flipping to net-short exposure on silver futures. Gross shorts have risen to their highest level since August 2019 which has dragged net-short exposure to its most bearish level since June 2019. Managed funds – who presumably use leverage – have been net-short for three weeks, so perhaps we’ll see large speculators follow suit by Friday’s report.
