Market News & Analysis
Weekly COT Report: USD Bulls Shed $10 Billion Of Exposure
Matt Simpson January 13, 2020 11:48 AM
Read our guide on how to interpret the weekly COT report
As of Tuesday 7th January:
- Net-long exposure to USD fell to $4.3 billion. At -$10.2 billion from the prior week, it’s the least bullish investors have been to the dollar since June 2018.
- Traders were the most bullish on GBP since May 2018.
- Large speculators were on the cusp of flipping net-long on NZD.
- Traders were their least bearish on JPY in nearly 3-months.
USD: With traders shedding -$10.2 billion in net-long exposure, it’s the largest weekly change since June 2018 and the largest negative decline since June 2015. It’s also the least bullish traders have been on the dollar in 19-months, since traders flipped to net-long. (Not) QE is certainly having an impact on the dollar, or at least traders perception of it, so perhaps this theme will persist until the Fed fix the issues in the repo market.
AUD: Net-short exposure has fallen to its lowest level in 2-months, and near similar levels seen in January 2019. And the timing is curious, given the RBA could very well cut rates early February. Still, perhaps this will provide bears with better price to consider short traders, particularly if inflation and / or employment data misses the mark ahead of RBA’s first meeting of the year.
NZD: Traders are on the cusp of flipping to net-long exposure. Moreover, we’ve seen a healthy rise of gross long exposure after shorts were culled between September and December. We continue to expect RBNZ to hold rate through Q1 so core view on NZD remains bullish.
As of Tuesday 7th January:
- Copper traders flipped to net-short exposure after just 3-week net long.
- Bullish exposure to platinum hit yet another record high.
- WTI traders were their most bullish since August 2018.
WTI: Whilst traders increased their bullish exposure to a 17-month high, it should be noted that tensions were high in the Middle East which supported oil prices. Yet with WTI’s failure to close above $64 and roll over, it trades back within range and we’d expect positioning to reflect this in the next report. This means range-trading strategies are preferred whilst prices remain below $64 - $65.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.