Hedge Funds
Leveraged funds hold a net short of 68,840 euro futures as asset managers cut their longs, CFTC data show
The latest Commitments of Traders figures, covering the week to October 20, show hedge funds and other speculators still bearish on the euro, cutting their yen shorts and switching harder into sterling.
HedgeWeekly News Desk ·
Leveraged funds were net short 68,840 euro futures contracts on the Chicago Mercantile Exchange as of Tuesday, October 20, according to the Commodity Futures Trading Commission's Traders in Financial Futures report released on Friday. The category, which covers hedge funds and CTAs, held 124,951 long contracts against 193,791 shorts. That left the net short 839 contracts bigger than a week earlier.
Asset managers, the biggest euro bulls in the market, cut their net long by 9,497 contracts to 190,421 as they added 6,648 shorts. Open interest in the contract rose by 3,399 to 877,940. The CFTC's broader legacy measure points the other way: non-commercial traders' net short fell by about 3,000 contracts to 134,524 because they added more longs than shorts.
Elsewhere in the major currencies, leveraged funds made their biggest shift in sterling. They raised their net long by 13,791 contracts to 24,104, mostly by covering 9,983 shorts. They also cut their net short in the yen by 10,783 contracts to 22,890, and lifted their Australian dollar net long by 1,906 to 52,497. Asset managers moved the other way on the Aussie, adding to a net short that now stands at 128,739 contracts.
Why it matters: The euro short has grown steadily. Leveraged funds' net position has fallen by almost 40,000 contracts over the past four weeks, and this is the third straight weekly decline, according to data compiled by cotdata.net. A GuruFocus report on the same figures linked the bearish stance to the political turmoil in France and the questions it raises about eurozone growth and European Central Bank policy. Allocators should note that the data are three days old by the time they are published. They do not include options, so headline figures from different outlets can vary depending on which trader categories and instruments they count.