EUR/USD flipped to net-short exposure, VIX bulls retain control: COT report

View the latest commitment of traders reports

Market positioning from the COT report – Tuesday, 22 October 2024:

Asset managers and large speculators were net-long VIX futures for a second week
Large speculators flipped to net-short exposure to EUR/USD futures
Traders increased net-long exposure to the USD by 10.6 billion last week (most bullish week since February 2019)
Net-short exposure to Swiss franc futures increased among large speculators and asset managers
CAD traders increased net-short exposure to a 9-weekhigh ahead of the BOC’s 50bp dovish cut
Large specs increased gross-long exposure to silver futures by 17.3% (12.1k contracts)
Net-long exposure for gold and silver futures increased for a second week among large specs and managed funds, ahead of record highs printed later in the week
Yet net-long exposure to copper futures declined for a second week while prices retraced lower for a fourth

US dollar positioning (IMM data) – COT report:

Large speculators smelled the coffee on the USD bullish bet, and flipped to net-long exposure last week. Asset managers were net-long for a third week, and by their most bullish amount in 14 weeks. But perhaps the most impressive stat is that traders increased bullish bets on the USD by $10.6 billion, which was their most bullish weekly change since February 2019. Perhaps this rally will have some legs after all, especially since we’re now seeing large speculators and asset managers increase longs and decrease shorts, as opposed to simply closing shorts like we saw in prior weeks.

EUR/USD (Euro dollar futures) positioning – COT report:

Large speculators flipped to net-short exposure for the first time since July, and by their most bearish level since September 2022. Gross shorts increased for a fifth week while gross longs were trimmed for a fourth. Asset managers remain heavily net long by 192.1k contracts, although it is down from 325k gross-longs from the second week of September.

VIX futures positioning – COT report:

Equity traders continued to hedge against US election event risk via the VIX last week, with both large speculators and asset managers increasing net-long exposure for a second week. Asset managers added 4.9k gross longs and trimmed -1.6k shorts. While VIX prices are not exactly accelerating higher, they do remain elevated around the 19 level, which is high compared with the lower double-digit prints seen in the first half of the year.

JPY/USD (Japanese yen futures) positioning – COT report:

It finally happened. Asset managers threw in their bullish yen towel and reverted to net-short exposure yen futures last week. Large speculators were also their least bullish in 11 weeks, and are now net-long by just 12.7k contracts. Both sets of traders reduced longs and increased shorts, so unless the BOJ surprise with some action this week then yen may continue to weaken in the foreseeable futures. Unless the US election has some tricks up its sleeve and prompts an exodus to the safety of the yen and Swiss franc.

Metals (gold, silver, copper) futures - COT report:

Another week, another record high for gold. And if gold rises, so does silver. Both sets of traders increased their net-long exposure to gold futures for a second week, although they also increased gross shorts slightly to suggest a certain level of nervousness at frothy heights.

They showed a more traditional approach with silver futures by increasing net-long exposure by adding to longs and reducing shorts. Net-long exposure to silver futures rose to its most bullish level since March 2020 among large speculators, and March 2022 among managed funds.

Copper was the odd one of the three metals, as net-long exposure retraced lower for a second week and process were lower for a fourth. So much for China’s stimulus adding to bullish bets.

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.