The Implications of Speculations
by Jennifer Thomson of GaveKal Capital,
The latest Commitment of Traders report (as of last Friday) highlights some extreme levels of speculation in several different assets.
Positioning in currency futures is supportive of a strengthening in the EUR, GBP, and JPY versus the USD as net long positions in the dollar moderate somewhat in the coming months.
With respect to commodities, the massive contraction in the net short position in gold seems to have slowed, with gold prices perking up a bit as a result. Meanwhile, the net long position in oil has contracted from a record high last November, leaving WTI with less bullish prospects.