Weekly CFTC Trader Positioning Data

• Shifting risk appetite, ISM-related concerns over the pace of US growth, and central bank-driven positioning were the key themes driving sentiment this week. The stabilization in EM-related jitters reversed the prior week’s bullish shift toward EUR and GBP, US growth concerns triggered an interrelated reaction in Japanese equities and JPY, the RBA’s shifting tone drove short covering in AUD and anticipation for the ECB meeting caused some investors to position for a decline in EUR, adding to the adverse shift back to net short.

• The CAD position was basically unchanged on a w/w basis, as market participants were focused elsewhere, leaving the net short position at $5.4bn. For AUD, short covering driven by the RBA’s shift to a neutral tone provided for a $0.8bn narrowing in the posi-tion to net short $5.0bn.

• EUR suffered the largest adverse shift in sentiment, with a $4.8bn w/w swing back to a net short $2.3bn position. A conflu-ence of factors were responsible, specifically near term stabiliza-tion in EM that reversed the prior week’s bullish shift to EUR, and the expectation for weakness ahead of the ECB. GBP also suffered as a result of EM stabilization, with the net long halving to $1.1bn.

• JPY short covering has continued for six consecutive weeks (see middle chart p2), pulling the net short position back within $10bn, a significant shift from the $17bn net short as of late December.