Swiss Franc Speculators are reducing their net short Euro positions, since Draghi’s comments on inflation. Apparently not only against the dollar but also against the Swiss Franc. This also means that the euro zone may be target real money (like purchases of stocks, real estate and bonds) instead of Switzerland. This makes both European stocks and a Euro long FX position interesting. With a stronger euro, purchases of Swiss stocks could also be an idea. The net long CHF position of against USD did barely change. It is not +1.3K positions. The dollar got stronger against the euro this week. With potential interest hikes, real money in the form of cash seems to flow into USD. This continues to be a drag on US exports and the profits of U.S. based companies. This is the reason why we prefer European stocks. Summer vacations have mostly ended. The news stream has picked up. Yet speculators have been mostly reluctant to make meaningful changes in their exposure to the currency futures. Reduction in short Euro positions There are a few notable exceptions. First, over the past several weeks, speculators have reduced gross short euro positions by more than 20% since the end of July. It stands at 173.3k contracts, after the bears covered 16.
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Swiss Franc
Speculators are reducing their net short Euro positions, since Draghi’s comments on inflation. Apparently not only against the dollar but also against the Swiss Franc. This also means that the euro zone may be target real money (like purchases of stocks, real estate and bonds) instead of Switzerland. This makes both European stocks and a Euro long FX position interesting. With a stronger euro, purchases of Swiss stocks could also be an idea.
The net long CHF position of against USD did barely change. It is not +1.3K positions. The dollar got stronger against the euro this week. With potential interest hikes, real money in the form of cash seems to flow into USD. This continues to be a drag on US exports and the profits of U.S. based companies. This is the reason why we prefer European stocks.
Reduction in short Euro positions
Sterling
Canadian Dollar and Mexican Peso
Treasuries
Crude Oil
13-Sept | Commitment of Traders | |||||
Currency | Net | Prior | Gross Long | Change | Gross Short | Change |
Euro | -81.5 | -92.6 | 91.8 | -5.5 | 173.3 | -16.7 |
Yen | 56.8 | 54.5 | 86.1 | +2.2 | 29.3 | -0.2 |
Sterling | -82.8 | -90.0 | 40.4 | +1.6 | 123.2 | -5.5 |
Swiss Franc | 1.3 | 1.5 | 20.9 | -2.0 | 19.5 | -1.9 |
C$ | 17.1 | 20.9 | 45.8 | +1.7 | 28.7 | +5.5 |
A$ | 36.5 | 39.0 | 63.1 | -3.1 | 26.7 | -0.6 |
NZ$ | 5.1 | 6.1 | 34.9 | -2.3 | 29.8 | -1.3 |
Mexican Peso | -65.7 | -58.4 | 19.9 | +3.1 | 85.7 | +10.4 |
U.S. Treasuries | 68.6 | -36.0 | 635.2 | -22.2 | 566.6 | +14.6 |
Crude Oil | 313.3 | +27.5 | 538.0 | +3.9 | 224.7 | -23.6 |
(CFTC, Bloomberg) Speculative positions in 000’s of contracts |