NY Open: Twenty pounds of headlines
Markets started the day in a confusion of incoming news as ECB chatter met with trade talk updates and US macro data. EURUSD took it on the chin and dropped from 1.1270 to 1.1235.
Head of Commodity Strategy
In the week to May 1 speculators bought dollars against every IMM currency futures that we track in this report. As a result of this the gross dollar short was cut by 21% to $19 billion. The main contributors were net selling of EUR, CHF and GBP.
Surprisingly, the gross long in EUR increased by 4067 lots to 100,443 lots so the 8% reduction in the net-long to an 18-week low was purely driven by a strong pick-up in fresh short selling.
In fixed income, leveraged funds extended bearish bets across the US yield curve with all maturities except 10-year notes being sold.
The total value of a one basis point move from 3-months Eurodollar to T-bonds ultra rose to $198 million, the highest in at least a year. This not least due to heavy selling at the front end of the curve where the net-short in 5-yr notes reached 780k lots, a 15-month high.
In equities, aggressive buying of the S&P500 flipped the position from a net-short to the highest net-long since 2009. In addition, specs bought Nasdaq and Dow Jones while selling out some more of the VIX long.