According to Shaun Osborne and Eric Theoret at Scotiabank, “CAD NET LONGS CONTINUE TO RISE, CAD REMAINS FLAT”

Data in this report cover up to Tuesday Feb 21 & were released Friday Feb 24.

• IMM data for the week through Feb 21 showed little change in aggregate positioning though the recent reduction in the market’s overall long USD position does appear to be slowing. Aggregate USD longs versus the major currencies stood at USD16.2bn this week, down marginally from last week’s USD16.27bn bull bet on the USD. This is the smallest speculative long ‘punt’ on the USD since October. •

• Net EUR shorts rose by USD1.49bn in the week to total USD7.6bn, the largest net short here since late January. Focus on record negative short-term, Eurozone bond yields and the French presidential election may account for the positioning shift as gross shorts (EUR bears) rebuild positions. •

• Investors lifted net AUD and net CAD longs but market timing looks poor, with the benefit of hindsight. The AUD has slipped on risk aversion and valuation concerns (near recent range highs) while the boost in net CAD longs (to the biggest bull bet on the CAD since May) looks odd in the context of a solidly range-bound market. • Positioning changes were limited elsewhere. Net short GBP and net short JPY positioning remains significant but neither contracts saw any real change on the week. Net MXN positioning remains bearish but net shorts were trimmed USD1.4bn in the week as bargain hunters stepped up purchases (gross MXN longs positioning higher, gross shorts stable). The net short has dropped back to the lowest since early Dec.

• Positioning changes were limited elsewhere. Net short GBP and net short JPY positioning remains significant but neither contracts saw any real change on the week. Net MXN positioning remains bearish but net shorts were trimmed USD1.4bn in the week as bargain hunters stepped up purchases (gross MXN longs positioning higher, gross shorts stable). The net short has dropped back to the lowest since early Dec.