Weekly COT Report - 25th March 2019
Matt Simpson March 25, 2019 3:24 AM
A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.
- GBP traders reduced net-short exposure by 22k contracts, its largest weekly change in 9 months.
- Adjusted for open interest, traders are the most bearish on VIX since 2008.
- JPY futures rise to 7-week high, despite bears outweighing bulls by a ratio of 4:1
- After a brief hiatus, traders revert to net-short on the NZD.
DXY: Net-long exposure fell by -9.1k contracts and sits at its least bullish level since July. With -6.4k long contracts closed and +2.7k short contracts added, it could mark a notable shift in sentiment for the dollar. That said, with bond yields falling and stocks wobbling at the highs we could see US inflows as a safe-haven over the near-term.
GBP: Net-short exposure has risen to its least bearish level since June 2018. Fuelled mostly by short-covering (22k short contracts closed) it’s the largest weekly change in 9-months and sees gross short exposure fall to its lowest level since November 2015. However, bulls remain on the side-line, adding just 230 contracts.
JPY: Gross long exposure hits its lowest level since September 2014. Despite the lack of bullish interest form large speculators, the yen continues to defy bearish views and sits at an 8-week high. Given the soured sentiment across markets these past two days, we could see a pick-up of bullish interest over the near-term. And this could see bears caught off-guard, with bearish bets outweighing bullish bets with a ratio of 4:1.
VIX: Two weeks ago we flagged that ‘short volatility’ could be near a sentiment extreme, as net-short exposure was at its lowest level since 2016 (once adjusted for open interest). As of last Tuesday, short exposure to VIX was its most extreme since April 2008. With so many traders short, its plausible we could see further spikes on the VIX, like seen on Friday.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.