GBP positions pushed further into positive territory, short USD positions fell back - Rabobank

According to the IMM Net Speculators’ Positioning as at October 03, 2017, net GBP positions pushed further into positive territory last week given the legacy impact from the hawkish BoE, notes the analysis team at Rabobank. 

Key Quotes

“That said, UK political stresses worsened into the end of the week after PM May’s disastrous conference speech suggesting these gains may not hold.”

“Speculators’ net short USD positions fell back. The previous week they had increased to their highest level since April 2014 despite the hawkish signals from the Fed. Fiscal policy and speculation regarding remains the ability of the GOP to push through tax reform this year remain a focus.”

“On the back of good growth expectations, EUR longs crept higher. This is despite concerns regarding divisions in the Eurozone that followed the Catalan referendum and the reduction of Merkel’s standing at the German election. That said, EUR longs remain below their early September high.”

“Net JPY short positions climbed for a second consecutive week last week suggesting that the market’s desire to hold JPY for safe haven reasons is dwindling. Strong levels of world growth are attracting funds into higher yielding destinations. That said, shorts are still well below the recent highs seen in July.”

“CHF positions remained in negative territory for a ninth consecutive week. The increase in short positions last week appears consistent with the increase in EUR longs.”

“CAD longs ticked higher, with a good set of September jobs data likely to provide further reassurance for the next release. AUD longs dropped back consistent with the lack of hawkish rhetoric from the RBA. Chinese economic data and prices of iron ore and coal also remain in focus.”