Speculative Position Adjustments Include the first Net Short Euro Position in Over a Year

There were several adjustments in speculative positioning in the futures market that we want to bring to your attention.  

In the currency futures, speculators are now net short euros for the first time since May 2017.  At a little less than 1.8k contracts, the net short position is not particularly large.  The record net long position was recorded in mid-April near 151k contracts.

The net position is a function of the gross longs and gross shorts.  The gross speculative shorts have surged from 86.4 at the end of April to 190.2k as of  August 14.  It increased almost 23k contracts last week alone.  It is the largest gross short position since February 217.  The record was set in 2005 near 270k contracts.

The gross long position peaked at a record 262k contracts in late January.  It fell to 174.5k by the end of July, but the bulls have not capitulated.  They had added to the gross long position for the past two CFTC reporting weeks to stand at 188.4k contracts.  Except for the recent past, it is still an extremely large position.

Speculative positioning in sterling also caught our eye.  The net short position is now the largest of the year at 60.7k contracts.   It is the fourth weekly increase and is the largest net short position since May 2017.    The bears have pounded sterling and added to the gross short position for the past three weeks, lifting it by more than 40k contract to 120.8k.  In late May it stood at about 50.6k contracts.

The bulls had the largest gross long position in a decade in mid-April of over 110k contracts.  The position has been slashed as sterling fell from near $1.44 to almost $1.2660 on August 15.  However, the bulls have begun trying to pick a bottom.  They have added to the gross long position for the past three reporting period and lifted the position from 32.2k contracts to a little more than 60k.

The bears have the upper hand in the gold futures market, and speculators have their first net short position since late 2001 (-3.7k contracts).  The shift is driven by an almost three-fold increase of the gross short position since the middle of June. It has risen from 72.5k contracts to 215.5k.  Speculators added to the gross short position without fail for the past nine reporting weeks.  The gross long position rose last week by 3.5k contracts (to 211.8k contracts) and has trended higher since reaching 185.3k in early June.

In light sweet crude, speculators have their smallest net long position since last November of 573.4k contracts.  This is primarily a function of longs liquidating as the gross short position is hoving near its smallest level since March 2005).  The gross longs have been slashed by almost 200k contracts since late April.  At 655.2k contracts, speculators have the smallest gross long position is the smallest in a little over a year.

 

Lastly, we turn to the 10-year Treasury note futures.  Speculators sold into the recent price gains and added 103.9k contracts to the gross short position for the reporting week ending August 14.  At 1.184 mln contracts, the gross short position is a record.  Since the end of Q2, the gross short position has risen by nearly 300k contracts.  The bulls have been peeling back longs since the record large position was reached in May 2017 a little below 950k contracts.  It had been halved by the end of July (471.7k) and has risen by 14k contacts net-net over the past two weeks.  The shifting gross long and short positions have seen the net position fall to almost 700k a record.  It is more than twice the size of the net speculative short position at the end of last year (~341k contracts).

To recap, speculators are gross short euro futures for the first time in 15 months.  The bulls do not appear to have capitulated.  The bears continue to press their case against sterling and have their largest net short sterling position since May 2017.   Speculators turned net short gold for the first time since late-2001.  Speculators have their smallest net long crude oil position since last November. The bears made a large stand in the 10-year Treasury note futures add more than 100k contracts to the record net short position.