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The Weekly Commitments of Traders Report
Know what the “smart money” is up to
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For most recent reports go to
Commitments of Traders
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To learn how to use C.O.T go to
Commitments of Traders – An Ultimate guide
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For more weekly C.O.T tracking go to
Commitments Of Traders Sheet
[/stm_icon_box][/vc_column][/vc_row][vc_row full_width=”stretch_row”][vc_column][vc_separator color=”sky” border_width=”7″][/vc_column][/vc_row][vc_row][vc_column width=”1/12″][/vc_column][vc_column width=”10/12″][vc_column_text]The Commitments of Traders Report is issued by CFTC.
It reports all open positions in futures markets of three main groups of traders:
- Commercial Traders – Hedgers
- Non-Commercial Traders – Money Managers
- Non-Reportable – Retail market
The report breaks down each Tuesday’s Open Interest and gives us a powerful view on what exactly the big guys have been doing in the marketplace and what their plans might be.
It is issued every Friday and includes data from Tuesday to Tuesday.
The three days prior to the release date are not included.
This is an essential tool for gauging long term sentiment in futures markets.
NOTE:
In this report, we cover EURO, GBP, AUD, JPY, CAD, and we focus on Non-Commercial traders as an indication of a profit driven bias.
C.O.T Positioning
EURUSD: Bullish
GBPUSD: Bullish
AUDUSD: Bullish
USDJPY: Bullish
USDCAD: Pause
EURO – Euro Futures
My Bias: Bullish
The EUR/USD pair is ending the week little changed at around 1.1040, recovering from a fresh 4-week low of 1.0988. Uncertainty around developments in the US-China trade deal has continued to lead the way, with the American dollar and the market’s sentiment, seesawing throughout the week
First-tier data coming from the EU failed to impress. German’s inflation came in at 0.9% YoY, while the EU CPI for the same period printed at 0.7%, both in line with the market’s expectations. Both economies published updates on growth, with the preliminary estimate of German Q3 Gross Domestic Product up by 0.1% and that of the Union up by 0.2%. The numbers were slightly better than anticipated, but indicating that the economies are barely avoiding recession, without signs of economic improvement.
Positions:
Speculators added to both sides of a transaction, although they preferred long side once again. This week they added 6K orders to their long positions and 3K to their short positions. They were 57K net short, which was lower from 60K in the previous week. Net speculative positions remain above 33 weeks moving average and my bias is also to the long side. Last week’s decline in the price of EURUSD should be treated as an opportunity to but this market at lower prices.
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
The GBP/USD near-term exchange rate outlook is neutral according to analysts at Scotiabank, saying “Sterling has steadied around the 50% retracement mark of 1.2872 (from the late-Oct peak) while it faces near-term resistance at 1.2900. GBPUSD downside looks supported by the mid-week range around 1.2840-1.2850.”
A fresh boost was in store for the Pound Sterling to US Dollar (GBP/USD) exchange rate ahead of the weekend as US manufacturing and industrial production figures fell short of forecast.
While forecasts had pointed towards a fresh contraction on both the month and the year investors were still disappointed by the extent of the deterioration on show.
The sharp dip in October’s capacity utilisation index offered a particular cause for concern, with the decline from 77.5% to 76.7% boding ill for the economic outlook in the fourth quarter.
Although US retail sales growth rebounded on the month in October this was not enough to prevent the GBP/USD exchange rate pushing higher on Friday.
Positions:
There was no much adjustments in GBP market this week. Speculators added 636 long positions and 1.5K short positions. They were 28K net short ( lower from 29K in the previous week ). The price action has not really move in the last few weeks but my long term outlook remains to the upside. The bullish outlook is strongly supported by the speculative sentiment.
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Bullish USDJPY
Hopes that the United States and China may soon end their trade war after a pair of high-ranking White House officials drove down demand for the safe-haven Japanese Yen on Friday. This move could continue this week if the optimism prevails.
White House economic adviser Larry Kudlow said on Thursday that negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in daily contact.
Speaking after an event at the Council on Foreign Relations late on Thursday, Kudlow told reporters that a deal was close though “not done yet,” Bloomberg reported.
“We are coming down to the short strokes,” Kudlow said in Washington. “We are in communication with them every single day right now.”
U.S. Commerce Secretary Wilbur Ross said in an interview on Fox Business Network Friday that there was a very high probability the United States would reach a final agreement on a phase one trade deal with China.
“We’re down to the last details now,” Ross said.
Positions:
Speculators were bearish this week. They added fresh 8.3K of short positions, while leaving their longs unchanged. They were 35K net short, which was up from 26K in the previous week. JPY bearish outlook prevails and I expect USDJPY to push higher in the coming weeks.
Strategy – no change:
Buy USDJPY on dips
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
Another day, another bout of volatility in Asia sparked by incoming data and expectations diverging. Whilst unemployment was forecast at 5.3% – it’s a step in the wrong direction where RBA policy is concerned. Yet to see employment for the first time in over 3 years, full-time employment contract and the participation rate fall further from its record highs took its toll on the Aussie which has broken key levels across the board.
As it stands, RBA expect unemployment to sit around 5.25% through to 2021 before it falls to 5%. Yet if the inverted correlation with capacity utilisation is to hold true we could still see unemployment fall over the coming months. As always, the correlation is imperfect, but the basic trend is apparent; a rising capacity utilisation (falling on the chart) leads to lower unemployment, and visa-versa.
Positions:
Speculators reversed last week’s surge in long positions. This week they covered 8.5K of their long positions. Just to remind you, they added 13K longs in the previous week. At the same time they added new 5.4K of short positions this week as well. They were 40.8K net short, which was hugely up from 26K in the previous week. Overall, the speculative positions has been up and down but my bias bullish in AUD futures.
Strategy:
Look out for long positions on dips
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
The Canadian dollar is in a bind. Traders are confused, markets are directionless, and they are looking for guidance. It is hard to find. The on-going U.S./China trade war and negotiations have unsettled traders. Prices of the so-called risk assets rise whenever there are rumours of a pending trade deal and reverse when the news isn’t forthcoming. That sentiment was on display overnight.
White House Economic Advisor Larry Kudlow said China and the U.S. were closing in on a deal. He said deputy level talks occurred this week adding “We’re getting close. The mood music is pretty good, and that has not always been so in these things.” That was music to the ears of commodity currency bulls. The Australian, New Zealand and Canadian dollars rallied in Asia but unwound the move in Europe.
Traders there dismissed Kudlow’s comments and focused on a Financial Times article claiming U.S. and China negotiators were struggling to finalize a deal. The FT claimed that “people close to the talks” said the White House was frustrated because China had not offered enough concessions to justify rolling back tariffs. The commodity bloc currencies retraced to their Toronto closing levels.
Traders are also concerned about the prolonged unrest and escalating violence in Hong Kong. They fear a heavy-handed response from China, and there is nothing the G-10 can do about it. The Chinese market is too large and too important to their economies.
Positions:
Speculators took profit this week. They covered 14K of their long positions. This accounts for an astonishing 16% of their total long exposure and could be a trigger for a large and sharp move in price. This clear bearish outlook and it might see the prices of USDCAD moving higher in the coming weeks. At the same time, speculators covered 2.4K of their short
Strategy:
Pause for now.
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