Archives of “December 2019” month

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CFTC Commitments of Traders report: GBP shorts trimmed but not as much as you might think

  
Analysis, Forex
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Forex futures positioning data for the week ended Tuesday, December 10:

Forex futures positioning data for the week ended Tuesday, December 10:
  • EUR short 68K vs 69K short last week. Shorts trimmed by 1K
  • GBP short 23K vs 30K short last week. Shorts trimmed by 7K
  • JPY short 44K vs 48K short last week. Shorts trimmed by 4k
  • CHF short 21K vs 22K short last week. Shorts trimmed by 1K
  • AUD short 37k vs 36K short last week. Shorts increased by 1K
  • NZD short 25K vs 27K short last week. Shorts trimmed by 2K
  • CAD long 21k vs 21K long last week.  No change
The big shifts recently have been paring GBP and NZD shorts. Those trends both continued this week but at a slower pace than you might have expected given the rallies in both. Next week’s data will capture the UK election and that should be instructive.

USTR clarifies which US tariffs will be rolled back

  
  Analysis

Statement obtained by Politico

USTR press statement: “The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.”
The tariffs that will be rolled back were imposed on Sept 1. The USTR also said the deal is ‘enforceable’.
This is good news but not nearly as good as reports yesterday about a 50% rollback on $360B in tariffs.
US stocks markets fell back into negative territory.
Full statement:
statement

Euphoria fades as phase on trade deal details revealed

  
Analysis, Forex

Some details still murky

USD/JPY is at the lows of North American trade and back to flat on the day.
Some details still murky
It appears as though China has balked at putting a specific number on US agricultural and manufacturing purchases, something the US had previously demanded. The problem for China is that putting a specific number on buying US agricultural goods would violate WTO rules. It also risks forcing them to buy US agriculture even if US prices are higher than elsewhere.
That might have caused some last-minute changes to the deal and a smaller tariff reduction. Yesterday’s reports said a 50% reduction on $360B of tariffed goods. Now it’s a 50% reduction on just $112B in goods.
I think risk assets still probably creep higher from here because it’s the time of year when stocks tend to benefit from a Santa Claus rally with tax-loss selling done. The UK election also removes a big uncertainty.
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