CFTC commitments of traders. Little change in the speculative positions this week

Forex futures positioning data for the week ending May 12, 2020

  • EUR long 78K vs 76K long last week. Shorts increased by 2K
  • GBP short 14K vs 12K short last week. Shorts increased by 2K
  • JPY long 28K vs 27K long last week. Longs increased by 1K
  • CHF long 7K vs 8K long last week. Longs trimmed by 1K
  • AUD short 35k vs 33K short last week. Shorts increased by 2K
  • NZD short 16K  vs 15K short last week. Shorts increased by 1K
  • CAD short 32k vs 32K short last week. Unchanged for the week
Highlights for the week:
  • The EUR longs remain the largest of the major currencies and steady in a 77K to 87K range (over the last 5 weeks).
  • The speculative positions were pretty much unchanged from last week. The biggest change were 2K changes in EUR, GBP,  and AUD.
Forex futures positioning data for the week ending May 12, 2020_

The Federal Reserve flags risks and twice–yearly report on financial hazards

Federal Reserve publishes its 2020 financial stability report

  • warns financial sector vulnerabilities likely to be significant in near-term
  • pandemic strains on household and business balance sheets likely created fragility’s that last for some time
  • warns banking sector may experience strains as a result of economic and financial stocks
  • Banks so far have been able to meet demand for credit line drawdowns while adding to loan-loss reserves
  • some hedge funds have been severely affected by large asset price declines and volatility, contributing to market dislocations
  • primary dealers struggled to provide intermediation services at peak stress periods
  • asset prices subject to significant declines if pandemic worsens
  • funding markets were less fragile than in financial crisis but still suffered strains required Fed intervention
  • high levels of business debt likely to make economic fallout from pandemic worse
  • pandemic poses severe risk to businesses of all sizes and millions of households
  • pandemic to cause a sharp rise in defaults on household debt
  • market debt for long dated treasuries and treasury futures in March fell to record low and has shown only modest improvements since
  • mortgage servicers under strain from forbearance could lead to less mortgage credit and some failures in the future
  • further dollar appreciation could put additional strains on US firms that rely on exports and supply chains in their operations
  • Covid 19 risks, a no deal Brexit, still poses risks to European and US financial systems
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