October 24, 2020 - Page 2 of 2 - Financial Occultist

S&P gets a boost

The outlook on Italy was raised to stable from negative with the rating affirmed at BBB by S&P.

No doubt it’s due to Italy’s strong long-and-short term commitments to fiscal restraint.

CFTC Commitments of Traders: Sterling shorts head to the exits

Forex futures positioning for the week ending October 20, 2020:

EUR long 166K vs 168K long last week. Longs trimmed by 2K
GBP short 2K vs 10K short last week. Shorts trimmed by 8K
JPY long 14K vs 20K long last week. Longs trimmed by 6K
CHF long 14K vs 12K long last week. Longs increased by 2K
AUD long 7K vs 4K long last week. Longs increased by 3K
NZD long 6K vs 6K long last week. No change this week
CAD short 19k vs 14K short last week. Shorts increased by 5K
Prior report

The GBP shorts were wise to get out of the way ahead of Wednesday’s news on restarting negotiations. The nearly-flat positioning now reflects the total lack of commitment in the trade lately.

Canadian dollar shorts had been paring bets for a few weeks but they’re getting back short again. I’d love to know the thinking on that trade from anyone who is in it.

Forex futures positioning for the week ending October 20, 2020:

It was a strong week for the kiwi

24-Oct-20 07:07 am

Anirudh Sethi

Sterling gains fade

The New Zealand dollar is the top performer this week while the US dollar was the laggard. Even today with USD staging a bit of a comeback, it’s not sticking as the kiwi pushes back into positive territory.

The break above the October highs is constructive for a retest of 0.6800 in the short term but over all the kiwi is right in the middle of the range it’s carved out since June.

Sterling had been atop the FX leaderboard this week but the enthusiasm about Brexit negotiations has quickly faded. I think the news and prognosis are better than ever but sterling traders have been burned by headlines too many times. GBP is going to be a rare ‘buy the fact’ trade if/when a deal is finally in reach.