The below summary highlights futures positions and changes made by hedge funds across commodities, forex, bonds and stock indices up until last Tuesday, January 19. A relatively quiet week where the market focused on a continued rise in Covid-related lockdowns and the beginning of the US earnings season. The reflation trade focus meanwhile began to fade with Republicans pushing back against President Biden’s $1.9 trillion Covid-19 relief plan.
While the Nasdaq pushed higher, the S&P 500 and global stocks in general traded unchanged while the dollar stayed bid after Yellen’s comment that the new administration is not seeking a weaker dollar. US 10-year bond yields ticked lower by four basis points as real yields slumped back below minus 1%. The Bloomberg Commodity Index traded lower for a second week, thereby attracting another week of mild profit taking.
Speculators made another albeit small reduction in bullish bets on 24 major commodity futures contracts. Overall the Bloomberg Commodity Index traded lower by 0.7% with losses in crude oil, natural gas and not least the soybean complex being partly offset by gains in platinum, corn and the soft contracts of sugar, cocoa and coffee. Overall the net-long was cut by 1% to 2.5 million lots, still near record levels, with the biggest reductions seen in soybeans, corn and natural gas while buying supported fuel products (gas oil & diesel), wheat and coffee.