Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
COT: Speculators continue to sell dollars and buy gold
Ole Hansen
Head of Commodity Strategy
Summary: The weekly Commitments of Traders (CoT) covering the week to July 2, delayed due to last weeks 4th July holiday was released yesterday. The below summary highlights the major changes that occurred in commodities, forex, bonds and stocks. Please find the attached PDF’s for additional information.
Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.
To download your copy of the Commitment of Traders: Commodity report for the week ending July 2, click here.
To download your copy of the Commitment of Traders: Forex report for the week ending July 2, click here.
To download your copy of the Commitment of Traders: Financials report for the week ending July 2, click here.
Commodities
Speculators bought WTI and sold Brent crude oil following the G20 meeting in Osaka and the decision by Opec+ to extend production cuts for another nine months. The net long in Brent, the global benchmark, has now following eight weeks of selling dropped to a five-months low. This as demand worries continue to outweigh production cuts and geopolitical risks.
Gold buying continued albeit at a slower pace than the previous four weeks. During this time the net-long has jumped by 208k lots to reach 241k lots, the highest since September 2017. The long versus short ratio reached 15 leaving the contract vulnerable to a short-term correction. Not least following the creation of two long tails and a double top on the weekly chart. Silver’s lack of momentum resulted in a small 7% reduction in the net-long to 22k lots.
To download your copy of the Commitment of Traders: Commodity report for the week ending July 2, click here.
To download your copy of the Commitment of Traders: Forex report for the week ending July 2, click here.
To download your copy of the Commitment of Traders: Financials report for the week ending July 2, click here.
Commodities
Speculators bought WTI and sold Brent crude oil following the G20 meeting in Osaka and the decision by Opec+ to extend production cuts for another nine months. The net long in Brent, the global benchmark, has now following eight weeks of selling dropped to a five-months low. This as demand worries continue to outweigh production cuts and geopolitical risks.
Gold buying continued albeit at a slower pace than the previous four weeks. During this time the net-long has jumped by 208k lots to reach 241k lots, the highest since September 2017. The long versus short ratio reached 15 leaving the contract vulnerable to a short-term correction. Not least following the creation of two long tails and a double top on the weekly chart. Silver’s lack of momentum resulted in a small 7% reduction in the net-long to 22k lots.
Nine weeks of corn buying paused after the June 28 acreage report threw a spanner in the works. The on paper bearish but, probably not report helped trigger a small 3% reduction in the net-long. Continued concerns relating to slow growing pace and with that a delayed (early frost exposed) harvest kept the long side immune from the selling with fresh short positions providing the change.
In soft commodities the most noticeable change was the 50% reduction in the Arabica coffee net-short to 15k lots, the lowest since September 2017.
Forex
Speculators cut their gross dollar long against ten IMM currency futures by $7.4 billion to just $12.4 billion, the lowest since June 2018. Bullish dollar bets have now been cut by 65% since the end of April peak.
In soft commodities the most noticeable change was the 50% reduction in the Arabica coffee net-short to 15k lots, the lowest since September 2017.
Forex
Speculators cut their gross dollar long against ten IMM currency futures by $7.4 billion to just $12.4 billion, the lowest since June 2018. Bullish dollar bets have now been cut by 65% since the end of April peak.
The dollar selling was broad-based but concentrated against EUR ($3.5bn), JPY ($1bn) and CAD ($1.6bn). The latter turned bullish for the first time since March 2018 while speculators were the least bearish on the JPY since June 2018. GBP and MXN being the two exceptions as they were both sold.
Financials
What is the Commitments of Traders report?
The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.
In commodities, the open interest is broken into the following categories: Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.
In financials the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.
Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.
They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.
The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.
In commodities, the open interest is broken into the following categories: Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.
In financials the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.
Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.
They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
John J. Hardy
Global Head of Macro Strategy
After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
Disclaimer