The latest IMM data cover the week from 12 to 19 August 2014.
IMM data released last Friday reveal that investors have returned to adding bearish EUR positions builds. The bearish EUR sentiment has sent non-commercial positioning in the single currency to the 6th percentile - the most bearish level since November 2012. The stretched positioning indicates a very high sensitivity of EUR to positive news out of the euro-zone. Fundamentally, we still expect the EUR/USD to edge lower but emphasise that positioning poses a barrier for rapid moves lower and the downtrend will consequently be gradual.
Noteworthy, the week to 19 August saw the largest single week bearish CAD build since March 2013. The move reflects a combination of the general USD bullish sentiment, a Bank of Canada on hold and profit taking after last week's strong CAD performance. Non-commercial CAD positioning remains in neutral territory after this week's move but we emphasise that CAD sensitivity to the upside has been markedly increased over the past two weeks.
Friday's report also showed that speculators have reduced net GBP longs. The move is a reflection of the unwinding of net longs in the wake of a softer-than-expected inflation report and consequently does not reveal a change of GBP sentiment. In fact, the Bank of England minutes on 20 August revealed a divided MPC for the first time in three years and we still see a potential for some short-term GBP performance in particular against the EUR.
In commodities, speculators slashed net longs in oil reflecting the fall in geopolitical risks. Non-commercial positioning in the black gold is from a historical perspective no longer stretched (75th percentile). Data also revealed that speculators continue to increase net shorts in copper. Speculative copper positioning is now at the most bearish level since June this year, suggesting an increased sensitivity in the copper price to positive news out of China.
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