Head of Commodity Strategy
Summary: This summary highlights positions and changes made by speculators such as hedge funds and CTA's across commodities and forex futures and options up until last Tuesday, November 10, the day of the U.S. election. The report highlights the markets first response to the corona vaccine news from Pfizer/BioNTech on November 9.
Saxo Bank publishes 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.
Link to latest report here.
Last night and delayed due to a Federal holiday last week, the U.S. CFTC released its weekly Commitments of Traders report covering futures positions and changes made by hedge funds across commodities and forex up until last Tuesday, November 10. The report highlights the markets first response to the corona vaccine news from Pfizer/BioNTech on November 9.
In commodities the vaccine news triggered a 10% rally in crude oil which supported a 17% increase in the net-long WTI and Brent crude oil position to 420k lots, still well below the six month average at 497k lots.
The 115 dollar top to bottom move in gold, meanwhile saw speculators cut bullish bets by 9% to 111k lots, the lowest since June 2019, when gold traded around $1300/oz, some 45% below the current market. From a bullish investor perspective the report was somewhat encouraging as the reduction was purely driven by long liquidation with no appetite for fresh short-selling seen in the data.
In forex speculators maintained an unchanged dollar short at $23.8 billion against ten IMM currency futures and the Dollar index. Selling of EUR, GBP and AUD being offset by a 49% jump in the JPY long to a four-year high.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
