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EUR/USD
Non-Commercials increased their net long positions in the Euro last week buying a further 8k contracts to take the total position to 73k contracts. Market expectations for further tapering announcements continue to build ahead of the upcoming June ECB meeting, which is this week’s headline event. Positioning data reflects a clear shift n bias among institutional investors as long positions continue to grow. With expectations so high and positions continuing to build there is plenty of scope for disappointment if the ECB refrain from making any adjustments at this meeting and an unchanged or dovish statement is likely to fuel some long covering if EUR
GBP/USD
Non-Commercials increased their net short positions in Sterling last week selling a further 6k contracts to take the total position to -30k contracts. Last week’s sales of Sterling were the first time the UK currency has been net-sold on a weekly basis in the last two months. Uncertainty continues to build ahead of the UK elections this week as the latest polls continue to show a dramatic narrowing of the Conservative party’s lead over the Labour party. The average lead has now fallen to just 7% from 23% shortly after the election was announced in April. Momentum has fizzled out in Sterling as traders await the outcome of the elections.
USD/JPY
Non-Commercials increased their net short positions in the Japanese Yen last week selling a further 1k contracts to take the total position to -52k contracts. The fairly muted position adjustment in the Japanese Yen reflects a better risk environment over recent weeks as manufacturing data continues to point to global growth and equity markets continue to rise. Â Recent data continues to be positive with April Industrial Production expanding at4%, its quickest pace since 2011.
USD/CHF
Non-Commercials reduced their net short positions in the Swiss Franc last week buying 1.2k contracts to take the total position to -18.5 contracts. Weekly adjustments in the currency, which is typically viewed as a safe haven, have been fairly muted over recent weeks reflecting a lack of directional catalysts in the market currently. SNB currency reserves and Swiss CPI will be the main data releases this week. The diminishing political risks in the eurozone are likely to see reduced currency reserves while CPI is forecast to remain weak.
