This summary highlights futures positions and changes made by speculators such as hedge funds and CTA’s across forex, bonds and stocks up until last Tuesday, August 4. Appetite for risk during this period remained strong with dollar weakness and rising negative real yields feeding a rise in prices across global asset markets. The S&P 500 Index added 2.7% to reach a fresh cycle high while the dollar weakened further against a basket of major currencies. The yield on U.S. ten-year notes dropped 7 bp to 0.50%, thereby supporting a further fall in real yields to a fresh record low at -1.06%.
Continued dollar weakness, albeit at a slowing pace, helped boost the net-short against ten IMM currencies and the Dollar Index to a nine-year high at $29.5 billion. However, just like the previous five weeks the expanding dollar short position was almost solely driven by another rise in the euro net-long to a fresh record of 180,648 lots (€22.6 billion). The 15% increase occurred as the cross challenged and eventually later in the week retraced from €1.19.