Financial Market Alerts

The commitment of traders (COT) report shows how large speculators are positioned across futures markets on the CME exchange.

Asset managers remained net-long the US dollar index, but may have since flipped to bet short with the USD index falling below 100. Traders were less bearish on the Australian and Canadian dollars, and increased bullish interest on EUR/USD.

A level of complacency ahead of Trump's tariffs can be seen in last week's futures market exposure, with traders increasing their short exposure to the VIX and Swiss franc, while also closing shorts against the Nasdaq at a notable pace.

Asset managers increased their gross-short exposure to EUR/USD for the first week in six. Asset managers trimmed net-long exposure to the US dollar index for a tenth week. And the large speculators that help flip VIX exposure to net-short may be regretting their move, looking at how Wall Street indices are now trading.

The culling of EUR/USD shorts on the futures market was the fastest weekly pace since the pandemic, which also coincided with futures traders effectively flipping to net-short USD for the first time since October. Bears also short-covered NZD/USD shorts at their fastest pace since December 2011, while predictably chasing gold prices higher as we suggested last week.

Large speculators flipped to net-long exposure EUR/USD futures for the first week in 21, and while they extended their bullish exposure to Japanese yen futures, it could be nearing a sentiment extreme. So USD/JPY bears may want to tread with caution.

Large speculators pushed their net-long exposure to Japanese yen futures to a record high for a second week, and were just net-short euro futures by 10k contracts.

Futures traders have continued to pile into long Japanese yen bets, with large speculators pushing their net-long exposure to a record high. But with USD/JPY holding above the December low and sentiment pointing to an extreme, perhaps USD/JPY can muster more of a bounce before its breaks back below 149.

63k long yen contracts last week between large speculators and asset managers, marking the fastest weekly pace of longs on record for both sets of traders. And with traders also shying away from bullish USD bets, it paints a bearish picture for USD/JPY.

We're seeing early signs that net-long bullish exposure on the USD may have peaked. While this may not necessarily mean a peak in the USD price, it does at least suggest the trend could slow or move sideways.

Some bullish fingers have likely been burned at this week's open, given the relatively bullish positioning on S&P 500 futures alongside short bets against the VIX rising to a 6-month high last week.