This summary highlights futures positions and changes made by hedge funds across commodities and forex during a dramatic week to June 14, the day before the FOMC delivered its 75-basis point rate hike. In the run up to this event, global markets had been spooked by another strong US inflation print which helped send global stocks to a 10% loss, Yields on US ten-year treasury notes jumped by a whopping 0.5% while the dollar rose by 3.2% against a broad basket of currencies. Bitcoin tanked by 30% while commodities tumbled with losses seen across all sectors on rising growth risks.
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The commodity sector suffered one of its biggest weekly reversals in recent months with the prospect for accelerated central bank action to curb runaway inflation inadvertently driving down demand as global growth begins to suffer. The Bloomberg Commodity Spot index traded lower by 7.5% with losses recorded across all sectors, most notably energy, led by a 22% decline in natural gas, and industrial metals where copper suffered a 6% decline.
Speculators responded to these dramatic developments by cutting bullish bets in 15 out of 24 major commodity futures by 7% to 1.6 million lots, a 22-month low. Biggest reductions seen in natural gas (30k), sugar (-32k), gold (-20k), WTI crude oil (-19k) and cocoa (-18k).