Archives of “February 2020” month

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CFTC Commitments of traders: EUR shorts increase as the price moves lower

  
Analysis, Forex

Forex futures net positioning data for the CFTC for the week ending February 18, 2020

  • EUR short 92K vs 86K short last week. Shorts increased by 6K
  • GBP long 29K vs 21K long last week. Longs increased by 8K
  • JPY short 27K vs 26K short last week. Shorts increased by 1k
  • CHF long 2K vs 4K long last week. Longs decreased by 2K
  • AUD short 38k vs 33K short last week. Shorts increased by 5K
  • NZD short 12K vs 4K short last week. Shorts increased by 8K
  • CAD long 8k vs 10K long last week. Longs decreased by 2K

The EUR is the biggest position with the short at -92K from -86K last week. The shorts are winning as the price reached the lowest level since 2017 this week.

Forex futures net positioning data for the CFTC for the week ending February 18, 2020

Major indices close lower. Indices also lower for the week

  
Analysis, US Market
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All-time highs were made but Thursday and Friday selling take the gains away

The major stock indices are ending the day lower with the NASDAQ falling by -1.79%. In a week where the NASDAQ and S&P index made new all-time highs, selling on Thursday and Friday have taken those gains away. The major indices are ending the week lower.

The final numbers are showing:
  • Dow industrial average -227.30 points or -0.78% at 28992.68
  • S&P index -35.55 points or -1.05% at 3337.68
  • NASDAQ index -174.38 points or -1.79% at 9576.59.
For the week, the Dow industrial average was the weakest followed closely by the NASDAQ index:
  • Dow industrial average, -1.46%
  • S&P index, -1.07%
  • Nasdaq index -1.39%

European indices end the session lower but off lowest levels

  
Analysis, Global Indices
  Tags

German DAX, -0.62%. France’s CAC, -0.62%. UK’s FTSE, -0.54%

The major European indices are ending the session (and the week) lower.
A look at the provisional closes are showing:
  • German DAX, -0.62%. The intra-day low extended to -1.2%
  • France’s CAC, -0.62%. The intra-day low extended to -1.1%
  • UK’s FTSE 100, -0.54%. The intra-day low extended to -0.89%
  • Spain’s Ibex, -0.46%. The intra-day low extended to -0.88%.
  • Italy’s FTSE MIB -1.34%. The intra-day low extended to -1.63%
The changes in ranges for the major stock indices in Europe and US
For the week, the these are ending in the red:
  • German DAX, -1.2%
  • France’s CAC, -0.74%
  • UK’s FTSE 100, -0.17%
  • Spain’s Ibex, -0.72%
  • Italy’s FTSE MIB, -0.49%

In other markets as London/European traders exit for the day shows:

  • S&P index -0.79%
  • NASDAQ index -1.18%
  • Dow -0.68%
Spot gold is trading up $20.06 or 1.24% at $1639.70
WTI crude oil futures are trading down $0.66 or -1.22% of $53.23

Dollar in a tricky spot after PMI readings from Europe

  
  Analysis

Can the euro and risk take heart from the arguably better readings today?

PMI

From the headlines alone, the euro can take heart in the fact that the readings today show some relative improvement – with domestic demand and services holding up – and there are also some signs of moderation in the manufacturing contraction.
Although it needs to be put into perspective, the market may not necessarily look at that considering the tendency to be short-sighted at times.
Going into the PMI releases today in Europe, risk was in a softer spot and the worry is that poor readings may compound virus fears ahead of the weekend.
The natural reaction would be such a scenario will be bad for risk and good for the dollar.
However, that did not play out. Instead, we are in a situation where the market could interpret things in two ways i.e. focus on the arguably better readings or proceed with some caution considering the details are still masking some potential issues.
The former would mean a possible short covering in the recent downside run in the euro and a short squeeze could see the dollar feel some pain ahead of the weekend.
Meanwhile, the latter could see the market sit in limbo for a bit before having to decide what may happen to risk (fear or greed) when Wall Street comes in. That means price action may be confined to levels that we are seeing now.
I would say this is the current predicament that the market is facing after the PMI readings in Europe today. In any case, don’t forget that there is also the US PMI readings later in the day so perhaps the market will be more responsive after clearing that hurdle.

Risk remains softer ahead of European trading

  
  Analysis
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Virus worries weigh on the market but Chinese stocks are still rallying

USGG10YR

Treasury yields are lower across the curve with 10-year yields back under 1.50%, slipping to its lowest levels since September last year as the market is leaning towards being more risk averse ahead of European trading today.
In turn, gold is breaking out in a strong way with price near the highs now around $1,628 with the currencies space also reflecting softer risk flows.
The aussie and kiwi are weighed lower with the franc among the better performers, despite narrower trading for the time being. USD/JPY is also seeing a bit of a pullback under 112.00 for now, so perhaps are we seeing a return to the norm for the yen?
Despite the negativity, Chinese stocks are continuing to rally as authorities prop up the equities market with more and more stimulus measures. The run just keeps going.
SHCOMP
It’ll be interesting to see if Wall Street can turn things around later today, but with PMI readings in the European morning likely to reaffirm worries about global growth, I reckon we may be set for a more risk averse period before the weekend this time around.
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