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AUD & JPY: An unlikely pair as largest held longs - Scotiabank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 14, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Research Team at Scotiabank, lists down the CFTC data which covers up to Tuesday Mar 8 & were released Friday Mar 11.

    Key Quotes

    “AUD and JPY are the largest held net longs vs. the USD, an unlikely pair as we consider their contrasting risk profiles. Tuesday’s position date incorporates the most recent U.S. payrolls and Fed comments from Monday, however it does not reflect either the BoC or ECB meetings. We note that the aggregate USD position has held steady just above the late February low, around levels last seen in mid-July 2014 at the start of the USD bull run. USD sentiment feels light heading next week’s FOMC with considerable risk to the long AUD and JPY positions. Bearish EUR sentiment also feels relatively light.

    Bearish CAD sentiment has moderated for a sixth consecutive week with a $0.4bn narrowing in the net short to $1.9bn. The squeeze in CAD shorts continues to drive much of the improvement as we note a remarkable stability in CAD longs. AUD has seen an impressive shift in sentiment over the past few months, with a long position that is now at levels last seen in September 2014. We see the greatest vulnerability in newly established longs built over the past 7 weeks.

    The net long JPY position appears increasingly extended, just shy of the March 2008 record (in terms of number of contracts) following a nearly unbroken run of improvement off the levels from mid-November. The position has shifted an impressive $15bn from mid-November and an even more impressive $19bn off the extended levels from June 2015.”
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