This summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, February 22. Once again a reporting week that ended a few days before a major risk event took place, this time Russia’s attack on Ukraine last Thursday which triggered major moves across most asset classes. During the week in question risk appetite was already being challenged with the MSCI World Index as well as the S&P 500 Index losing more than 3% while US treasury yields reversed lower with the 10-year tenor falling 10 basis points to 1.94%
The dollar traded unchanged, with speculators continuing to reduce their net longs, before rallying in the days that followed while commodities saw strong gains led by grains, energy and precious metals.
The Bloomberg Commodity Spot index rose 3.3% in the week to last Tuesday, thereby reaching a fresh record high. Gains were led by commodities and sectors most at risk of being impacted by supply disruptions from Russia and Ukraine. These were crude oil, gas, palladium and grains while gold and silver received a safe haven bid amid lower bond yields and stock market turmoil.
Speculators reacted to these developments by adding length to gold and silver as well as grains, while net selling of crude oil surprisingly extended into a fifth week. Overall the total exposure across 24 major commodity futures rose 4% to 2.2 million lots representing an $8.4 billion increased in the nominal exposure to $171 billion.