Summary: The week to December 11 saw speculators sell dollars ahead of the strongest weekly close in 19 months, reducing bullish dollar bets against nine IMM currency futures by $3 billion to $29 bn.
Speculators sold dollars ahead of the strongest weekly close in 19 months. In the week to December 11, they reduced bullish dollar bets against nine IMM currency futures by $3 billion or 9% to $29 bn. The belief in a stronger dollar into 2019, however, remained elevated as per the chart below.
The reduction was broad-based and was led by short-covering in EUR, JPY, AUD and NZD.
In fixed income leveraged funds were net-buyers across the yield curve with the exception being the five-year note where the net-short reach a fresh record high of 1.3 million lots, a total contract value of $147bn.
The week covered the soft jobs report on December 7 and subsequent rally which saw much of the 2019 rate hike premium being eroded. Record-breaking volumes in three-month Eurodollar futures on December 6 resulted in the net-short falling to just 800,000 lots, a 26-month low.
Source: https://www.home.saxo/insights/content- ... ium-erodes
