The below summary highlights futures positions and changes made by hedge funds across commodities, forex, bonds and stock indices up until last Tuesday, January 5. A holiday shortened week that saw the rally across assets extend into the first week of trading in 2021. Not least commodities where the Bloomberg Commodity Index jumped 4.2% while the dollar weakened.
However, the cut off last Tuesday, was before key events in the US where Biden after a tumultuous day in Washington was confirmed as President and the Democratic Party secured a senate majority after winning both seats in the Georgia run-off elections. Two events that turbocharged hopes of large stimulus measures thereby triggering a jump in US Treasury yields, new record highs in US stocks and a stronger dollar. In commodities, these events led to a sharp reversal in gold and silver while copper and crude oil extended their already strong gains from December.
The broad commodity rally that saw the Bloomberg Commodity Index rise by 10% during the last quarter extended into the new year with the index gaining 4.2% during the holiday shortened week to January 5. This as inflows to value, cyclical and reflation investing strategies continued.
Speculators responded to the continued rally by increasing an already record long commodity exposure by 3% to 2.6 million lots, representing a nominal exposure of $134 billion.