Weekly COT Report: Sterling Bears Unloaded Shorts Ahead Of UK Election

A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.

As of Tuesday 10th December:

  • Large speculators reduced net-long exposure to USD by -$1.6 billion to $18.2 billion.
  • On the DXY, traders are their least bullish since July 2018
  • Minor weekly changes to net positioning overall. GBP saw the largest, with short exposure falling -7.4k contracts ahead of the UK election.
  • Trader were their most bearish on the Swiss franc in 6-months. Whilst yen traders slightly reduced bearish exposure last week, net-short exposure remains near a 6-month high



USD: Whilst still net-long, bullish exposure on the USD has remain subdued and effectively range bound between +10 to +20 billion since July. This is neither a compelling bullish or bearish case, so perhaps we’ll continue to see DXY chop around in ranges until a more divergent theme appears next year between the US and ROW (rest of world).



GBP: Gross longs reached their highest level since April, ahead of Friday’s UK election which saw net-short exposure at its least bearish level since May. Given the 2% rally at the exit polls, we wouldn’t be too surprised to see traders stitch to net-long in this week’s report (whilst data is released on Friday, the report is compiled on Tuesday)



As of Tuesday 10th December:

  • Whilst gold bugs saw a slight reduction in bullish exposure, bears remain side lined and account for just 16.9% of all contracts traded
  • Bearish exposure on copper is at its lowest level since May, adding weight to the argument for a bullish breakout
  • Traders were their most bullish on platinum since August 2016



Copper: Gross shorts have been trending lower since August and, whilst early days, we saw a slight pickup with gross longs last week. Last week’s high saw copper futures trade at their highest level since May, although Friday’s bearish engulfing candle warns of near-term weakness and likely mean reversion. Sill, we’ll see if its upswing since September’s low can push higher over the coming weeks.


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