Archive for Opinions – Page 3

29 Mar

Week Ahead: Oil primed for more upside?

By ForexTime 

  • Crude ↑ over 15% in Q1
  • Oil could kick off Q2 with bang
  • OPEC+ JMMC meeting, EIA data & NFP in focus
  • Prices bullish on D1 & W1 timeframe
  • Key level of interest at $83

Despite the holiday shortened week ahead for UK and European markets, the second quarter of 2024 could kick off with a bang.

All eyes will be on top-tier economic reports including the US March nonfarm payrolls and speeches by a handful of Fed officials:

Sunday 31st May

  • Easter Sunday
  • CN50: China non-manufacturing PMI, manufacturing PMI

Monday, 1st April

  • Easter Monday –UK and Europe markets closed
  • CN50: China Caixin manufacturing PMI
  • JP225: Japan Tankan business sentiment, manufacturing PMI
  • SGD: Singapore home sales
  • TWN: Taiwan manufacturing PMI
  • USD: US construction spending, ISM manufacturing

Tuesday, 2nd April

  • AUD: Australia Melbourne Institute inflation, RBA meeting minutes
  • EUR: Eurozone S&P Global Manufacturing PMI, Germany PMI
  • UK100: UK S&P Global/CIPS Manufacturing PMI
  • US500: US factory orders, JOLTS job openings, Fed speeches

Wednesday, 3rd April

  • CN50: China Caixin services PMI
  • JPY: Japan services PMI
  • EUR: Eurozone CPI, unemployment
  • OIL: OPEC+ JMMC meeting, EIA weekly report
  • US30: US ISM Services, Fed Chair Jerome speech, Chicago Fed President Austan Goolsbee speech

Thursday, 4th April

  • AUD: Australia building approvals
  • EUR: Eurozone S&P Global Services PMI, PPI
  • SEK: Swedish Riksbank meeting minutes
  • NZD: New Zealand building permits
  • USD: US initial jobless claims, Fed speeches

Friday, 5th April  

  • AUD: Australia trade balance
  • CAD: Canada unemployment
  • SGD: Singapore retail sales
  • JPY: Japan household spending
  • EUR: Eurozone retail sales, Germany factory orders
  • RUS2000: US March nonfarm payrolls (NFP)

Our attention lands on oil benchmarks which have appreciated in Q1 amid geopolitical risks and expectations around OPEC+ supply cuts tightening global markets.

Crude gained over 15% in Q1 with prices hovering near it’s 2024 high.

Note: Oil markets are closed for Good Friday, but trading will resume on Monday 1st April.

With the path of least resistance pointing north, further gains could be on the horizon.

Here are 4 factors that may impact oil prices in the week ahead:

    1) OPEC+ JMMC meeting (virtual)

No changes are expected to oil supply policy when OPEC+ alliance’s Joint Ministerial Monitoring Committee meets on Wednesday.

Note: At the start of the month, OPEC+ announced they will extend voluntary supply cuts that total 2.2 million barrels a day through the end of June.

So, the next major decision may be in June when OPEC+ meets to decide output for the second half of 2024. Nevertheless, any fresh insight or clues on what to expect from the cartel ahead of the big meeting could influence oil markets. 

 

    2) US Energy Information Agency (EIA) report

It is worth noting that Crude oil inventories unexpectedly jumped by 3.2 million barrels in the week ended March 22nd, after falling by 2 million barrels in the previous week.

The next EIA report published on Wednesday 3rd April may influence oil’s short to medium-term outlook.

  • Another build in US crude oil inventories may hit the demand outlook, pulling crude oil prices lower as a result. 
  • A decline in US inventories could boost optimism around demand which may push the global commodity higher.

 

   3) US March nonfarm payrolls (NFP)

The US economy is expected to have created 203k jobs in March, a noticeable drop from the 275k jobs in February, while the unemployment rate is expected to remain steady at 3.9%.

Note: Lower interest rates could stimulate economic growth, which fuels oil demand.

Traders are currently pricing in a 68% probability of a 25-basis point Fed rate but by June, with a cut fully priced in by July.

Note: Lower interest rates may also lead to a weaker dollar, which boosts oil which is priced in dollars.

  • Oil prices may push higher if a disappointing US jobs report reinforces bets around the Fed cutting rates three times this year.
  • A strong report that supports the case around the Fed keeping rates higher for longer could drag the global commodity lower. 

 

    4) Technical forces 

Crude seems to be gaining positive momentum on the daily charts with prices trading above the 50,100 and 200-day SMA. However, the Relative Strength Index is approaching the 70 level, indicating that prices may be overbought.

  • A solid breakout and daily close above $83 may pave a path towards $86.40 and potentially $90 in the medium to longer term.
  • Should $83 prove to be a tough resistance, prices may slip back towards $80 and the 200-day SMA at $79.00. 

Forex-Time-LogoArticle by ForexTime

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Energy Opinions
28 Mar

As climate change and pollution imperil coral reefs, scientists are deep-freezing corals to repopulate future oceans

By Mary Hagedorn, Smithsonian Institution 

Coral reefs are some of the oldest, most diverse ecosystems on Earth, and among the most valuable. They nurture 25% of all ocean life, protect coasts from storms and add billions of dollars yearly to the global economy through their influences on fisheries, new pharmaceuticals, tourism and recreation.

Today, the world’s coral reefs are degrading at unprecedented rates due to pollution, overfishing and destructive forestry and mining practices on land. Climate change driven by human activities is warming and acidifying the ocean, producing a reef crisis that could cause most corals to go extinct within a few generations.

Healthy corals like these on Australia’s Lady Elliot Reef could disappear by the 2030s if climate change is not curbed.
Rebecca Spindler, CC BY-ND

I am a marine biologist at the Smithsonian’s National Zoo and Conservation Biology Institute. For 17 years, I have worked with colleagues to create a global science program called the Reef Recovery Initiative that aims to help save coral reefs by using the science of cryopreservation.

This novel approach involves storing and cooling coral sperm and larvae, or germ cells, at very low temperatures and holding them in government biorepositories.

These repositories are an important hedge against extinction for corals. Managed effectively, they can help offset threats to the Earth’s reefs on a global scale. These frozen assets can be used today, 10 years or even 100 years from now to help reseed the oceans and restore living reefs.

Smithsonian scientists use cryopreserved coral sperm to increase the genetic diversity of elkhorn coral.

Safely frozen alive

Cryopreservation is a process for freezing biological material while maintaining its viability. It involves introducing sugarlike substances, called cryoprotectants, into cells to help prevent lethal ice formation during the freezing phase. If done properly, the cells remain frozen and alive in liquid nitrogen, unchanged, for many years.

Many organisms survive through cold winters in nature by becoming naturally cryopreserved as temperatures in their habitats drop below freezing, Two examples that are common across North America are tardigrades – microscopic animals that live in mosses and lichens – and wood frogs.

Today, coral cryopreservation techniques rely largely on freezing sperm and larvae. Since 2007, I have trained many colleagues in coral cryopreservation and worked with them to successfully preserve coral sperm. Today we have sperm from over 50 species of corals preserved in biorepositories worldwide.

We have used this cryopreserved sperm to produce new coral across the Caribbean via a selective breeding process called assisted gene flow. The goal was to use cryopreserved sperm and interbreed corals that would not necessarily have encountered each other – a type of long-distance matchmaking.

Genetic diversity is maintained by combining as many different parents as possible to produce new sexually produced offspring. Since corals are cemented to the seabed, when population numbers in their area decline, new individuals can be introduced via cryopreservation. The hope is that these new genetic combinations might have an adaptation that will help coral survive changes in future warming oceans.

Two coral heads, one bleached white, the other still its natural brown color.
Corals in Kaneohe Bay, Hawaii during 2014 and 2015 warming events in which over 80% of corals were affected. Some species and individuals, like the coral at left, were resistant to warming.
Claire Lager, Smithsonian, CC BY-ND

These assisted gene flow studies produced 600 new genetic-assorted individuals of the threatened elkhorn coral Acropora palmata. As of early 2024, there are only about 150 elkhorn individuals left in the wild in the Florida population. If given the chance, these selectively bred corals held in captivity could significantly increase the wild elkhorn gene pool.

Preserving sperm cells and larvae is an important hedge against the loss of biodiversity and species extinctions. But we can only collect this material during fleeting spawning events when corals release egg and sperm into the water.

These episodes occur over just a few days a year – a small time window that poses logistical challenges for researchers and conservationists, and limits the speed at which we can successfully cryo-bank coral species.

To complicate matters further, warming oceans and increasingly frequent marine heat waves can biologically stress corals. This can make their reproductive material too weak to withstand the rigors of being cryopreserved and thawed.

An elkhorn coral produced through assisted gene flow, showing vigorous growth and development.
Cody Engelsma, CC BY-ND

Scaling up the rescue

To collect coral material faster, we are developing a cryopreservation process for whole coral fragments, using a method called isochoric vitrification. This technique is still developing. However, if fully successful, it will preserve whole coral fragments without causing ice to form in their tissues, thus producing viable fragments after they’ve thawed that thrive and can be placed back out on the reef.

To do this, we dehydrate the fragment by exposing it to a viscous cryoprotectant cocktail. Then we place it into a small aluminum cylinder and immerse the cylinder in liquid nitrogen, which has a temperature of minus 320 degrees Fahrenheit (minus 196 Celsius).

This process freezes the cylinder’s contents so fast that the cryoprotectant forms a clear glass instead of allowing ice crystals to develop. When we want to thaw the fragments, we place them into a warm water bath for a few minutes, then rehydrate them in seawater.

Using this method, we can collect and cryopreserve coral fragments year-round, since we don’t have to wait and watch for fleeting spawning events. This approach greatly accelerates our conservation efforts.

Protecting as many species as possible will require expanding and sharing our science to create robust cryopreserved-and-thawed coral material through multiple methods. My colleagues and I want the technology to be easy, fast and cheap so any professional can replicate our process and help us preserve corals across the globe.

We have created a video-based coral cryo-training program that includes directions for building simple, 3D-printed cryo-freezers, and have collaborated with engineers to develop new methods that now allow coral larvae to be frozen by the hundreds on simple, inexpensive metal meshes. These new tools will make it possible for labs around the world to significantly accelerate coral collection around the globe within the next five years.

Without coral reefs, the world would lose a valuable source of food, coastal protection, medicines and income – and some of the world’s most unique and beautiful ecosystems.

Safeguarding the future

Recent climate models estimate that if greenhouse gas emissions continue unabated, 95% or more of the world’s corals could die by the mid-2030s. This leaves precious little time to conserve the biodiversity and genetic diversity of reefs.

One approach, which is already under way, is bringing all coral species into human care. The Smithsonian is part of the Coral Biobank Alliance, an international collaboration to conserve corals by collecting live colonies, skeletons and genetic samples and using the best scientific practices to help rebuild reefs.

To date, over 200 coral species, out of some 1,000 known hard coral species, and thousands of colonies are under human care in institutions around the world, including organizations connected with the U.S. and European arms of the Association of Zoos and Aquariums. Although these are clones of colonies from the wild, these individuals could be put into coral breeding systems that could be used for later cryopreservation of their genetically-assorted larvae. Alternatively, their larvae could be used for reef restoration projects.

Until climate change is slowed and reversed, reefs will continue to degrade. Ensuring a better future for coral reefs will require building up coral biorepositories, establishing on-land nurseries to hold coral colonies and develop new larval settlers, and training new cryo-professionals.

For decades, zoos have used captive breeding and reintroduction to protect animals species that have fallen to critically low levels. Similarly, I believe our novel solutions can create hope and help save coral reefs to reseed our oceans today and long into the future.The Conversation

About the Author:

Mary Hagedorn, Research Scientist, Smithsonian Institution

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Opinions
27 Mar

How AI and a popular card game can help engineers predict catastrophic failure – by finding the absence of a pattern

By John Edward McCarthy, Arts & Sciences at Washington University in St. Louis 

Humans are very good at spotting patterns, or repeating features people can recognize. For instance, ancient Polynesians navigated across the Pacific by recognizing many patterns, from the stars’ constellations to more subtle ones such as the directions and sizes of ocean swells.

Very recently, mathematicians like me have started to study large collections of objects that have no patterns of a particular sort. How large can collections be before a specified pattern has to appear somewhere in the collection? Understanding such scenarios can have significant real-world implications: For example, what’s the smallest number of server failures that would lead to the severing of the internet?

Research from mathematician Jordan Ellenberg at the University of Wisconsin and researchers at Google’s Deep Mind have proposed a novel approach to this problem. Their work uses artificial intelligence to find large collections that don’t contain a specified pattern, which can help us understand some worst-case scenarios.

Can you find a matching set?
Cmglee/Wikimedia Commons, CC BY-SA

Patterns in the card game Set

The idea of patternless collections can be illustrated by a popular card game called Set. In this game, players lay out 12 cards, face up. Each card has a different simple picture on it. They vary in terms of number, color, shape and shading. Each of these four features can have one of three values.

Players race to look for “sets,” which are groups of three cards in which every feature is either the same or different in each card. For instance, cards with one solid red diamond, two solid green diamonds and three solid purple diamonds form a set: All three have different numbers (one, two, three), the same shading (solid), different colors (red, green, purple) and the same shape (diamond).

Marsha Falco originally created the game Set to help explain her research on population genetics.

Finding a set is usually possible – but not always. If none of the players can find a set from the 12 cards on the table, then they flip over three more cards. But they still might not be able to find a set in these 15 cards. The players continue to flip over cards, three at a time, until someone spots a set.

So what is the maximum number of cards you can lay out without forming a set?

In 1971, mathematician Giuseppe Pellegrino showed that the largest collection of cards without a set is 20. But if you chose 20 cards at random, “no set” would happen only about one in a trillion times. And finding these “no set” collections is an extremely hard problem to solve.

Finding ‘no set’ with AI

If you wanted to find the smallest collection of cards with no set, you could in principle do an exhaustive search of every possible collection of cards chosen from the deck of 81 cards. But there are an enormous number of possibilities – on the order of 1024 (that’s a “1” followed by 24 zeros). And if you increase the number of features of the cards from four to, say, eight, the complexity of the problem would overwhelm any computer doing an exhaustive search for “no set” collections.

Mathematicians love to think about computationally difficult problems like this. These complex problems, if approached in the right way, can become tractable.

It’s easier to find best-case scenarios – here, that would mean the fewest number of cards that could contain a set. But there were few known strategies that could explore bad scenarios – here, that would mean a large collection of cards that do not contain a set.

Ellenberg and his collaborators approached the bad scenario with a type of AI called large language models, or LLMs. The researchers first wrote computer programs that generate some examples of collections of many that contain no set. These collections typically have “cards” with more than four features.

Then they fed these programs to the LLM, which soon learned how to write many similar programs and choose the ones that give rise to the largest set-free collections to undergo the process again. Iterating that process by repeatedly tweaking the most successful programs enables them to find larger and larger set-free collections.

Square of nine circles, four of which are colored blue, connected by grey, red, green, and yellow lines
This is another version of a ‘no set,’ where no three components of a set are linked by a line.
Romera-Peredes et al./Nature, CC BY-SA

This method allows people to explore disordered collections – in this instance, collections of cards that contain no set – in an entirely new way. It does not guarantee that researchers will find the absolute worst-case scenario, but they will find scenarios that are much worse than a random generation would yield.

Their work can help researchers understand how events might align in a way that leads to catastrophic failure.

For example, how vulnerable is the electrical grid to a malicious attacker who destroys select substations? Suppose that a bad collection of substations is one where they don’t form a connected grid. The worst-case scenario is now a very large number of substations that, when taken all together, still don’t yield a connected grid. The amount of substations excluded from this collection make up the smallest number a malicious actor needs to destroy to deliberately disconnect the grid.

The work of Ellenberg and his collaborators demonstrates yet another way that AI is a very powerful tool. But to solve very complex problems, at least for now, it still needs human ingenuity to guide it.The Conversation

John Edward McCarthy, Professor of Mathematics, Arts & Sciences at Washington University in St. Louis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Opinions Programming
26 Mar
solar systems

California is wrestling with electricity prices – here’s how to design a system that covers the cost of fixing the grid while keeping prices fair

By Yihsu Chen, University of California, Santa Cruz and Andrew L. Liu, Purdue University 

Small-scale solar power, also known as rooftop or distributed solar, has grown considerably in the U.S. over the past decade. It provides electricity without emitting air pollutants or climate-warming greenhouse gases, and it meets local energy demand without requiring costly investments in transmission and distribution systems.

However, its expansion is making it harder for electric utilities and power grid managers to design fair and efficient retail electricity rates – the prices that households pay.

Under traditional electricity pricing, customers pay one charge per kilowatt-hour of electricity consumption that covers both the energy they use and the fixed costs of maintaining the grid. As more people adopt rooftop solar, they buy less energy from the grid. Fewer customers are left to shoulder utilities’ fixed costs, potentially making power more expensive for everyone.

This trend can drive more customers to leave the system and raise prices further – a scenario known as the utility death spiral. One 2018 study calculated that two-thirds of recent electricity distribution cost increases at California’s three investor-owned utilities were associated with the growth of residential solar.

With abundant sun and solar-friendly policies, California has 36% of U.S. small-scale solar capacity, much more than any other state. And the state is engaged in a heated debate over pricing electricity in ways designed to make energy less expensive for low-income households.

We study energy markets and public policy affecting energy and the environment, and have analyzed various retail electricity rate structures and their economic impacts on power producers and consumers. Our key finding is that an income-based, fixed-charge rate structure of the type that California is currently considering offers the most efficient and equitable solution – if it is designed correctly.

The California Legislature approved fixed-rate electricity charges, based on income, in 2022. Now, state utility regulators are weighing a proposal that would formalize them.

Two-part power bills

The debate over fixed charges began in 2022, when the California Legislature enacted an energy bill that ordered state regulators to study income-based fixed charges and decide whether to adopt them by July 1, 2024. Then the state’s three largest utilities – Southern California Edison, Pacific Gas and Electric, and San Diego Gas & Electric – submitted a proposal to the state Public Utilities Commission in mid-2023 that would separate retail bills into two parts: a fixed charge and a variable charge.

The fixed charge would be a preset monthly fee, independent of energy usage but tied to income levels, so wealthier customers would pay a larger share of grid maintenance costs. The variable charge would be based on the amount of electricity consumed and would cover the actual costs of electricity production and delivery.

Historically, these actual costs have typically ranged between 4 to 6 cents per kilowatt-hour. Today, the average residential rate in California often exceeds 30 cents per kilowatt-hour because it covers fixed costs as well as electricity use.

Who benefits?

A two-part billing system that separates fixed costs from variable usage charges offers potential benefits for both consumers and utilities.

For utilities, the fixed charge offers a stable revenue stream. The companies know how many households they serve, and they can plan on the fixed amounts that those households will pay each month. Households that go solar would still pay the fixed charge, since most of them draw electricity from the grid when the sun doesn’t shine.

This approach provides financial stability for the utility and access to the grid for all. Consumers would benefit because with a certain amount of income guaranteed, utilities could charge significantly less per kilowatt-hour for the actual electricity that households use.

One significant concern is that if electricity costs less, people may use more of it, which could undermine efforts toward energy conservation and lead to an increase in emissions. In our view, the way to address this risk is by fine-tuning the two-part billing structure so that it covers only a portion of the utilities’ costs through fixed charges and incorporates the rest into the variable usage rates.

Put another way, combining a lower fixed charge with a higher variable charge would ensure that utilities can still cover their fixed costs effectively, while encouraging mindful energy use among consumers. Ensuring affordable electricity for consumers, fair cost recovery for utilities and overall fairness and efficiency in the energy market requires striking a delicate balance.

Another argument from critics, often labeled “energy socialism,” asserts that higher-income households might end up subsidizing excessive electricity use by lower-income households under the income-based rate structure. In our view, this perception is inaccurate.

Wealthy households would pay more to maintain the grid, via larger fixed charges, than poorer households, but would not subsidize lower-income households’ energy use. All income groups would pay the same rate for each additional kilowatt-hour of electricity that they use. Decisions on energy use would remain economically driven, regardless of consumers’ income level.

Fixed fees are too big

While our research supports California utilities’ approach in principle, we believe their proposal has shortcomings – notably in the proposed income brackets.

As currently framed, households with annual incomes between US$28,000 and $69,000 would pay a fixed fee of $20 to $34 per month. Households earning between $69,000 and $180,000 would pay $51 to $73 per month, and those earning more than $180,000 would pay $85 to $128.

The middle-income bracket starts just above California’s median household income. Consequently, nearly half of all California households could find themselves paying a substantial monthly fee – $51 to $73 – regardless of their actual electricity usage.

It could be hard to convince consumers to pay significant fixed fees for intangible services, especially middle-income residents who have either gone solar or may do so. Not surprisingly, the proposal has encountered considerable pushback from the solar industry.

Finding the sweet spot

In response to public outcry, California lawmakers recently introduced Assembly Bill 1999, which would replace the income-graduated fixed-charge requirement with fixed charges of $5 per month for low-income customers and up to $10 per month for others. In our view, this reaction goes too far in the other direction.

Capping fixed charges at such low levels would force utilities to hike their energy use rates to cover fixed costs – again, risking the death spiral scenario. Our research indicates that there is a range for the fixed charge that would cover a reasonable share of utilities’ fixed costs, but is not high enough to burden consumers.

Without utility cost data, we can’t pinpoint this range precisely. However, based on estimates of utilities’ costs, we believe the caps proposed in AB 1999 are too low and could end up unfairly burdening those the bill aims to protect.

In our research, based on a hypothetical case study, we found a sweet spot in which fixed charges cover about 40% of utilities’ fixed costs. Charges at this level provide maximum benefit to consumers, although they reduce energy producers’ profits.

Our findings are similar to an alternative proposal jointly presented by The Utility Reform Network, a nonprofit consumer advocacy organization, and the Natural Resources Defense Council, an environmental advocacy group. This plan suggests a two-part rate structure with an average fixed charge of about $36 per month. Low-income households would pay $5 per month, and those earning over $150,000 yearly would pay about $62.

We believe this proposal moves in the right direction by ensuring fair contributions to grid costs, while also encouraging efficient energy use and investment in clean energy infrastructure. It could act as a guide for other U.S. states searching for methods to balance utility fixed-cost recovery with fair pricing and continued growth of small-scale solar power.

This article has been updated to remove unsubstantiated information about the 2019 Saddleridge wildfire in California provided by AP in a photo caption.The Conversation

About the Author:

Yihsu Chen, Professor of Technology Management in Sustainability, University of California, Santa Cruz and Andrew L. Liu, Associate Professor of Industrial Engineering, Purdue University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Economics & Fundamentals Opinions
24 Mar

FX Speculators drop Australian Dollar bets to new record low

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday March 19th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Mexican Peso & Brazilian Real

The COT currency market speculator bets were sharply lower this week as just two out of the eleven currency markets we cover had higher positioning while the other nine markets had lower speculator contracts.

Leading the gains for the currency markets was the Mexican Peso (24,378 contracts) with the Brazilian Real (1,627 contracts) also showing a positive week.

The currencies seeing declines in speculator bets on the week were the EuroFX (-26,065 contracts) with the British Pound (-17,251 contracts), the Australian Dollar (-16,698 contracts), the Japanese Yen (-13,690 contracts), the Canadian Dollar (-6,274 contracts), the US Dollar Index (-5,507 contracts), the Swiss Franc (-2,630 contracts), the New Zealand Dollar (-2,654 contracts) and Bitcoin (-1,102 contracts) also registering lower bets on the week.

Speculators drop their Australian Dollar bets to new record low

Highlighting the COT currency’s data this week is the renewed bearishness in the speculator’s positioning for the Australian dollar. Large speculative Aussie currency positions dropped this week by over -16,000 net contracts, the largest weekly decline in twenty-six weeks and the third straight weekly fall. The AUD speculator positions have decreased in nine out of the past ten weeks as well with an overall drop by -75,264 net contracts in that ten-week period.

This rise in bearishness has pushed the speculators bets to the most bearish level on record at a total of -107,538 net contracts. This surpasses the previous record of -96,946 contracts that was hit on September 19th of 2023. The overall Aussie speculator positioning has now been in bearish territory since dropping from a net bullish position to a net bearish position on May 25th of 2021 and this week marks the 148th consecutive week of continuous bearish speculator levels.

Denting the sentiment for the Aussie Dollar was a recent interest rate hold by the Reserve Bank of Australia (RBA) on March 19th. The RBA left its cash rate at 4.35 percent as inflation continues to decrease and with many market watchers feeling this was a dovish meeting and statement.

The Australian dollar is in a downtrend, according to our trend following model, with the Aussie closing out the week against the US Dollar at 0.6531. The AUD/USD currency pair opened the 2024 trading year at the 0.6823 exchange rate and has been trending lower since hitting a multi-year high of approximately 0.8000 in February of 2021.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Mexican Peso & British Pound

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Mexican Peso (100 percent) and the British Pound (89 percent) lead the currency markets this week. The New Zealand Dollar (60 percent) comes in as the next highest in the weekly strength scores.

On the downside, the Australian Dollar (0 percent), the Swiss Franc (0 percent), the US Dollar Index (6 percent) and the Japanese Yen (15 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (6.3 percent) vs US Dollar Index previous week (17.9 percent)
EuroFX (40.9 percent) vs EuroFX previous week (52.0 percent)
British Pound Sterling (88.6 percent) vs British Pound Sterling previous week (100.0 percent)
Japanese Yen (14.8 percent) vs Japanese Yen previous week (27.0 percent)
Swiss Franc (0.4 percent) vs Swiss Franc previous week (8.1 percent)
Canadian Dollar (27.9 percent) vs Canadian Dollar previous week (33.2 percent)
Australian Dollar (0.0 percent) vs Australian Dollar previous week (13.9 percent)
New Zealand Dollar (59.8 percent) vs New Zealand Dollar previous week (67.4 percent)
Mexican Peso (100.0 percent) vs Mexican Peso previous week (87.4 percent)
Brazilian Real (47.9 percent) vs Brazilian Real previous week (45.8 percent)
Bitcoin (34.9 percent) vs Bitcoin previous week (51.4 percent)

Mexican Peso & British Pound top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Mexican Peso (22 percent) and the British Pound (12 percent) lead the past six weeks trends for the currencies and are the only markets with positive scores.

The Swiss Franc (-44 percent) leads the downside trend scores currently with the Australian Dollar (-30 percent), Japanese Yen (-28 percent) and the Canadian Dollar (-25 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-1.8 percent) vs US Dollar Index previous week (12.3 percent)
EuroFX (-5.9 percent) vs EuroFX previous week (-6.1 percent)
British Pound Sterling (12.4 percent) vs British Pound Sterling previous week (24.1 percent)
Japanese Yen (-28.2 percent) vs Japanese Yen previous week (-19.4 percent)
Swiss Franc (-43.7 percent) vs Swiss Franc previous week (-40.8 percent)
Canadian Dollar (-24.7 percent) vs Canadian Dollar previous week (-23.9 percent)
Australian Dollar (-29.8 percent) vs Australian Dollar previous week (-27.2 percent)
New Zealand Dollar (-2.9 percent) vs New Zealand Dollar previous week (9.9 percent)
Mexican Peso (21.7 percent) vs Mexican Peso previous week (12.4 percent)
Brazilian Real (-12.1 percent) vs Brazilian Real previous week (-12.5 percent)
Bitcoin (-8.6 percent) vs Bitcoin previous week (12.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week totaled a net position of 679 contracts in the data reported through Tuesday. This was a weekly fall of -5,507 contracts from the previous week which had a total of 6,186 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.3 percent. The commercials are Bullish-Extreme with a score of 98.0 percent and the small traders (not shown in chart) are Bearish with a score of 22.9 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:65.416.213.0
– Percent of Open Interest Shorts:62.523.38.7
– Net Position:679-1,6911,012
– Gross Longs:15,5733,8613,091
– Gross Shorts:14,8945,5522,079
– Long to Short Ratio:1.0 to 10.7 to 11.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):6.398.022.9
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-1.82.0-1.2

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week totaled a net position of 48,342 contracts in the data reported through Tuesday. This was a weekly fall of -26,065 contracts from the previous week which had a total of 74,407 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.9 percent. The commercials are Bullish with a score of 61.5 percent and the small traders (not shown in chart) are Bearish with a score of 20.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: New Sell – Short Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.859.311.6
– Percent of Open Interest Shorts:20.470.67.6
– Net Position:48,342-74,13025,788
– Gross Longs:182,382388,83975,816
– Gross Shorts:134,040462,96950,028
– Long to Short Ratio:1.4 to 10.8 to 11.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):40.961.520.1
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-5.94.81.7

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week totaled a net position of 53,200 contracts in the data reported through Tuesday. This was a weekly fall of -17,251 contracts from the previous week which had a total of 70,451 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.6 percent. The commercials are Bearish-Extreme with a score of 13.4 percent and the small traders (not shown in chart) are Bullish with a score of 66.7 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:52.029.315.6
– Percent of Open Interest Shorts:25.058.513.3
– Net Position:53,200-57,6174,417
– Gross Longs:102,60557,89830,742
– Gross Shorts:49,405115,51526,325
– Long to Short Ratio:2.1 to 10.5 to 11.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):88.613.466.7
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.4-16.119.7

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week totaled a net position of -116,012 contracts in the data reported through Tuesday. This was a weekly lowering of -13,690 contracts from the previous week which had a total of -102,322 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.8 percent. The commercials are Bullish-Extreme with a score of 84.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.4 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:21.960.315.5
– Percent of Open Interest Shorts:60.322.215.2
– Net Position:-116,012115,119893
– Gross Longs:66,274182,29946,762
– Gross Shorts:182,28667,18045,869
– Long to Short Ratio:0.4 to 12.7 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):14.884.485.4
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-28.227.7-1.1

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week totaled a net position of -20,500 contracts in the data reported through Tuesday. This was a weekly fall of -2,630 contracts from the previous week which had a total of -17,870 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.4 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: New Sell – Short Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.268.213.5
– Percent of Open Interest Shorts:46.821.631.5
– Net Position:-20,50033,392-12,892
– Gross Longs:13,00348,8259,665
– Gross Shorts:33,50315,43322,557
– Long to Short Ratio:0.4 to 13.2 to 10.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.4100.018.6
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-43.757.7-41.8

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week totaled a net position of -37,148 contracts in the data reported through Tuesday. This was a weekly lowering of -6,274 contracts from the previous week which had a total of -30,874 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.9 percent. The commercials are Bullish with a score of 77.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.3 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:19.866.511.7
– Percent of Open Interest Shorts:36.048.613.6
– Net Position:-37,14841,437-4,289
– Gross Longs:45,761153,40727,007
– Gross Shorts:82,909111,97031,296
– Long to Short Ratio:0.6 to 11.4 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):27.977.413.3
– Strength Index Reading (3 Year Range):BearishBullishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-24.723.1-16.9

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week totaled a net position of -107,538 contracts in the data reported through Tuesday. This was a weekly lowering of -16,698 contracts from the previous week which had a total of -90,840 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 32.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: New Sell – Short Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:17.371.98.6
– Percent of Open Interest Shorts:66.019.412.5
– Net Position:-107,538116,062-8,524
– Gross Longs:38,207158,91919,035
– Gross Shorts:145,74542,85727,559
– Long to Short Ratio:0.3 to 13.7 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.032.7
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-29.826.4-0.8

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week totaled a net position of -189 contracts in the data reported through Tuesday. This was a weekly decrease of -2,654 contracts from the previous week which had a total of 2,465 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 59.8 percent. The commercials are Bearish with a score of 40.6 percent and the small traders (not shown in chart) are Bullish with a score of 56.7 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:37.951.98.5
– Percent of Open Interest Shorts:38.351.98.1
– Net Position:-189-7196
– Gross Longs:19,06426,1184,278
– Gross Shorts:19,25326,1254,082
– Long to Short Ratio:1.0 to 11.0 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):59.840.656.7
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-2.92.40.7

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week totaled a net position of 128,670 contracts in the data reported through Tuesday. This was a weekly lift of 24,378 contracts from the previous week which had a total of 104,292 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish with a score of 38.7 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:60.437.02.5
– Percent of Open Interest Shorts:18.080.81.1
– Net Position:128,670-132,9844,314
– Gross Longs:183,182112,1327,548
– Gross Shorts:54,512245,1163,234
– Long to Short Ratio:3.4 to 10.5 to 12.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):100.00.038.7
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:21.7-20.5-7.5

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week totaled a net position of 10,314 contracts in the data reported through Tuesday. This was a weekly rise of 1,627 contracts from the previous week which had a total of 8,687 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.9 percent. The commercials are Bullish with a score of 50.4 percent and the small traders (not shown in chart) are Bullish with a score of 55.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:63.331.05.7
– Percent of Open Interest Shorts:46.751.12.1
– Net Position:10,314-12,5262,212
– Gross Longs:39,44419,3473,551
– Gross Shorts:29,13031,8731,339
– Long to Short Ratio:1.4 to 10.6 to 12.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.950.455.0
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-12.111.42.5

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week totaled a net position of -2,096 contracts in the data reported through Tuesday. This was a weekly decrease of -1,102 contracts from the previous week which had a total of -994 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.9 percent. The commercials are Bullish-Extreme with a score of 96.6 percent and the small traders (not shown in chart) are Bearish with a score of 32.1 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:74.47.85.0
– Percent of Open Interest Shorts:80.74.02.5
– Net Position:-2,0961,253843
– Gross Longs:24,6832,5801,663
– Gross Shorts:26,7791,327820
– Long to Short Ratio:0.9 to 11.9 to 12.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):34.996.632.1
– Strength Index Reading (3 Year Range):BearishBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-8.612.61.8

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions
23 Mar

Speculator Extremes: Peso, Silver, Aussie & Franc lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on March 19th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

Mexican Peso


The Mexican Peso speculator position comes in as the most bullish extreme standing this week. The Mexican Peso speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 21.7 this week. The overall net speculator position was a total of 128,670 net contracts this week with a boost of 24,378 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Silver


The Silver speculator position comes next in the extreme standings this week. The Silver speculator level is now at a 99.4 percent score of its 3-year range.

The six-week trend for the percent strength score was 54.2 this week. The speculator position registered 52,435 net contracts this week with a weekly gain of 11,457 contracts in speculator bets.

DowJones Mini


The DowJones Mini speculator position comes in third this week in the extreme standings. The DowJones Mini speculator level resides at a 96.8 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 2.4 this week. The overall speculator position was 22,445 net contracts this week with a jump of 6,774 contracts in the weekly speculator bets.

British Pound


The British Pound speculator position comes up number four in the extreme standings this week. The British Pound speculator level is at a 88.6 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 12.4 this week. The overall speculator position was 53,200 net contracts this week with a drop of -17,251 contracts in the speculator bets.

Gasoline


The Gasoline speculator position rounds out the top five in this week’s bullish extreme standings. The Gasoline speculator level sits at a 87.2 percent score of its 3-year range. The six-week trend for the speculator strength score was 11.0 this week.

The speculator position was 70,008 net contracts this week with an increase of 10,470 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Australian Dollar


The Australian Dollar speculator position comes in as the most bearish extreme standing this week. The Australian Dollar speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -29.8 this week. The overall speculator position was -107,538 net contracts this week with a drop of -16,698 contracts in the speculator bets.

Swiss Franc


The Swiss Franc speculator position comes in next for the most bearish extreme standing on the week. The Swiss Franc speculator level is at a 0.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -43.7 this week. The speculator position was -20,500 net contracts this week with a decrease of -2,630 contracts in the weekly speculator bets.

US Dollar Index


The US Dollar Index speculator position comes in as third most bearish extreme standing of the week. The US Dollar Index speculator level resides at a 6.3 percent score of its 3-year range.

The six-week trend for the speculator strength score was -1.8 this week. The overall speculator position was 679 net contracts this week with a decline of -5,507 contracts in the speculator bets.

Soybeans


The Soybeans speculator position comes in as this week’s fourth most bearish extreme standing. The Soybeans speculator level is at a 6.6 percent score of its 3-year range.

The six-week trend for the speculator strength score was -1.5 this week. The speculator position was -167,653 net contracts this week with a rise of 12,760 contracts in the weekly speculator bets.

Soybean Meal


Finally, the Soybean Meal speculator position comes in as the fifth most bearish extreme standing for this week. The Soybean Meal speculator level is at a 8.7 percent score of its 3-year range.

The six-week trend for the speculator strength score was -4.8 this week. The speculator position was -45,705 net contracts this week with a gain of 11,182 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Opinions
22 Mar

Week Ahead: EURAUD on breakout watch…

By ForexTime 

  • EURAUD waits for directional spark
  • Prices rangebound on M1 chart
  • Incoming data could rock minor currency pair
  • Technical indicators favour bulls
  • Bloomberg model: 77% chance EURAUD – (1.64508 – 1.67710)

Were you able to catch your breath after such an intense trading week?

Well, at least the final week of March seems lighter in comparison with US and UK markets closed for Good Friday:

Monday, 25th March  

  • JPY: BoJ January meeting minutes
  • USD: Atlanta Fed President Raphael Bostic speech

Tuesday, 26th March

  • AUD: Australia consumer confidence
  • USD: US Conference Board consumer confidence

Wednesday, 27th March

  • CN50:China industrial production, Big China banks report earnings
  • AUD: Australia monthly CPI
  • EUR: Eurozone economic confidence, consumer confidence

Thursday, 28th March

  • AUD: Australia retail sales
  • EUR: Germany unemployment
  • NZD: New Zealand business confidence
  • GBP: UK Q4 GDP revision
  • USD: US University of Michigan consumer sentiment, GDP, initial jobless claims

Friday, 29th March

  • US and UK markets closed for Good Friday
  • JPY: Japan unemployment, Tokyo CPI, industrial production, retail sales
  • USD: US February PCE report

Nevertheless, traders may still be presented with fresh opportunities across the board due to key data from major economies.

Our attention lands on the EURAUD which remains trapped within a wide range on the monthly timeframe. Key monthly resistance can be found at 1.6800 and support at 1.6150.

Note: The EURAUD has failed to secure a monthly close above or below this range since March 2023.

It is a similar picture on the weekly charts as prices trade within a tighter range with weekly support at 1.6450 and resistance at 1.6650.

Note: The EURAUD is up roughly 2.5% since the start of 2024.

After bouncing within a weekly range for the past 10 weeks, could a major breakout be on the horizon? Watch out for these 3 factors:

  1. Key AU data

Now that the Reserve Bank of Australia (RBA) has moved to a more neutral stance on rates, much attention will be directed towards data which could provide clues on the central bank’s next move.

Australia’s consumer confidence, monthly inflation figures and retail sales may provide insight into the health of the economy while also impacting interest rate expectations.

Traders are currently pricing in a 37% probability of a 25-basis point RBA cut by June, with this jumping to 88% by August.

  • EURAUD is likely to rise if overall AU economic data reinforces the case for lower interest rates and weaken the AUD as a result.
  • Should economic data exceed market forecasts, this may hit bets around the RBA cutting rates – pulling the EURAUD lower as the AUD appreciates.

 

  1. Top EU data

In Europe, it’s all about the latest Eurozone economic and consumer confidence which could impact sentiment towards the European economy and ECB rate cut expectations. Germany – Europe’s largest economy will also be in focus as it publishes its latest unemployment figures.

Traders are currently pricing in an 88% probability of a 25-basis point ECB cut by June, with this a move fully priced in by July.

Note: It has been roughly two weeks since the ECB decided to leave interest rates unchanged in March.

  • The EUR could depreciate if overall data from the EU support the argument around lower interest rates in 2024, dragging the EURAUD lower as a result.
  • A positive set of economic figures from Europe could push back ECB cut rates, supporting the EURAUD as the EUR strengthens.

 

  1. Technical forces

It remains a choppy affair for the EURAUD on the daily charts with prices trading within a 200 pip range. Although prices are trading above the 50, 100 and 200-day SMA, there seems to be a tough tug of war between bulls and bears.

  • A solid breakout and daily close above 1.6500 may open the doors towards 1.6740 and 1.6800, respectively.
  • Should prices slip back below the 200-day SMA, this could trigger a selloff towards 1.6450.

Bloomberg’s FX model points to a 77% chance that EURAUD will trade within the 1.64508 – 1.67710 range over the next week.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions
20 Mar

Building fairness into AI is crucial – and hard to get right

By Ferdinando Fioretto, University of Virginia 

Artificial intelligence’s capacity to process and analyze vast amounts of data has revolutionized decision-making processes, making operations in health care, finance, criminal justice and other sectors of society more efficient and, in many instances, more effective.

With this transformative power, however, comes a significant responsibility: the need to ensure that these technologies are developed and deployed in a manner that is equitable and just. In short, AI needs to be fair.

The pursuit of fairness in AI is not merely an ethical imperative but a requirement in order to foster trust, inclusivity and the responsible advancement of technology. However, ensuring that AI is fair is a major challenge. And on top of that, my research as a computer scientist who studies AI shows that attempts to ensure fairness in AI can have unintended consequences.

Why fairness in AI matters

Fairness in AI has emerged as a critical area of focus for researchers, developers and policymakers. It transcends technical achievement, touching on ethical, social and legal dimensions of the technology.

Ethically, fairness is a cornerstone of building trust and acceptance of AI systems. People need to trust that AI decisions that affect their lives – for example, hiring algorithms – are made equitably. Socially, AI systems that embody fairness can help address and mitigate historical biases – for example, those against women and minorities – fostering inclusivity. Legally, embedding fairness in AI systems helps bring those systems into alignment with anti-discrimination laws and regulations around the world.

Unfairness can stem from two primary sources: the input data and the algorithms. Research has shown that input data can perpetuate bias in various sectors of society. For example, in hiring, algorithms processing data that reflects societal prejudices or lacks diversity can perpetuate “like me” biases. These biases favor candidates who are similar to the decision-makers or those already in an organization. When biased data is then used to train a machine learning algorithm to aid a decision-maker, the algorithm can propagate and even amplify these biases.

Why fairness in AI is hard

Fairness is inherently subjective, influenced by cultural, social and personal perspectives. In the context of AI, researchers, developers and policymakers often translate fairness to the idea that algorithms should not perpetuate or exacerbate existing biases or inequalities.

However, measuring fairness and building it into AI systems is fraught with subjective decisions and technical difficulties. Researchers and policymakers have proposed various definitions of fairness, such as demographic parity, equality of opportunity and individual fairness.

Why the concept of algorithmic fairness is so challenging.

These definitions involve different mathematical formulations and underlying philosophies. They also often conflict, highlighting the difficulty of satisfying all fairness criteria simultaneously in practice.

In addition, fairness cannot be distilled into a single metric or guideline. It encompasses a spectrum of considerations including, but not limited to, equality of opportunity, treatment and impact.

Unintended effects on fairness

The multifaceted nature of fairness means that AI systems must be scrutinized at every level of their development cycle, from the initial design and data collection phases to their final deployment and ongoing evaluation. This scrutiny reveals another layer of complexity. AI systems are seldom deployed in isolation. They are used as part of often complex and important decision-making processes, such as making recommendations about hiring or allocating funds and resources, and are subject to many constraints, including security and privacy.

Research my colleagues and I conducted shows that constraints such as computational resources, hardware types and privacy can significantly influence the fairness of AI systems. For instance, the need for computational efficiency can lead to simplifications that inadvertently overlook or misrepresent marginalized groups.

In our study on network pruning – a method to make complex machine learning models smaller and faster – we found that this process can unfairly affect certain groups. This happens because the pruning might not consider how different groups are represented in the data and by the model, leading to biased outcomes.

Similarly, privacy-preserving techniques, while crucial, can obscure the data necessary to identify and mitigate biases or disproportionally affect the outcomes for minorities. For example, when statistical agencies add noise to data to protect privacy, this can lead to unfair resource allocation because the added noise affects some groups more than others. This disproportionality can also skew decision-making processes that rely on this data, such as resource allocation for public services.

These constraints do not operate in isolation but intersect in ways that compound their impact on fairness. For instance, when privacy measures exacerbate biases in data, it can further amplify existing inequalities. This makes it important to have a comprehensive understanding and approach to both privacy and fairness for AI development.

The path forward

Making AI fair is not straightforward, and there are no one-size-fits-all solutions. It requires a process of continuous learning, adaptation and collaboration. Given that bias is pervasive in society, I believe that people working in the AI field should recognize that it’s not possible to achieve perfect fairness and instead strive for continuous improvement.

This challenge requires a commitment to rigorous research, thoughtful policymaking and ethical practice. To make it work, researchers, developers and users of AI will need to ensure that considerations of fairness are woven into all aspects of the AI pipeline, from its conception through data collection and algorithm design to deployment and beyond.The Conversation

About the Author:

Ferdinando Fioretto, Assistant Professor of Computer Science, University of Virginia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Opinions Programming
20 Mar

Cocoa beans are in short supply: what this means for farmers, businesses and chocolate lovers

By  Michael E Odijie, UCL 

A shortage of cocoa beans has led to a near shutdown of processing plants in Côte d’Ivoire and Ghana, the two countries responsible for 60% of global production. With chocolate makers around the world reliant on west Africa for cocoa, there is significant concern about the impact on the prices of chocolate and the livelihood of farmers. Cocoa researcher Michael Odijie explains the reasons for the shortage.

Why has cocoa production declined sharply in west Africa?

Three factors are at play: environmental, economic cycle related and human.

One environmental factor is the impact of the El Niño weather phenomenon, which has caused drier weather in west Africa. It has contributed to problems on farms, such as the swollen shoot virus disease. As a result, Ghana has lost harvests from nearly 500,000 hectares of land in recent years.

The economic cycle of cocoa production refers to the inherent patterns of expansion and contraction in cocoa farming. For example, as cocoa trees age, they become susceptible to diseases, requiring high maintenance costs. Historically, farmers have tended to abandon old farms and start anew in fresh forests. Unfortunately, finding new forests is now increasingly difficult. Perhaps the most severe issue of all is the lack of fair compensation for sustainable cocoa production

The human factor includes challenges such as illegal mining, which has overtaken numerous farms in Ghana. Sometimes, farmers lease their land to illegal miners in exchange for payment. These mining activities degrade the quality of the land, making it unsuitable for cocoa cultivation.

The global market for chocolate and chocolate products is on the rise. It is projected to grow faster than 4% annually over the next few years. This growing demand for cocoa underscores the urgency in addressing the intertwined issues that relate to the industry’s sustainability.

Have west African governments intervened to help cocoa farmers?

In February 2024, the Ghana Cocoa Board (Cocobod), regulator of the country’s cocoa sector, secured a World Bank loan of US$200 million to rehabilitate plantations affected by the cocoa swollen shoot virus. The board will take over the disease-ridden farms, remove and replace the afflicted cocoa trees, and nurture the new plantings to the fruiting stage before returning them to the farmers.

This practice of Cocobod taking out loans to assist farmers is a longstanding one in Ghana. For instance, in 2018, Cocobod used part of a $600 million loan from the African Development Bank to rehabilitate aging plantations and those hit by diseases. And at the start of the current harvest season in October, the producer price was raised: farmers are paid more, a move made inevitable by the surge in global prices. Also, Ghana Cocobod has established a task force to shield cocoa farms from the harmful impacts of mining. It has cooperated with police to stem the smuggling of cocoa to neighbouring countries, particularly those that offer a stronger currency.

In Côte d’Ivoire, relatively little action has been taken. It appears the government is still assessing the situation. But there have been measures to curb smuggling of cocoa, prompted by the fact that the shortage is driving up prices in neighbouring countries. Côte d’Ivoire does benefit from numerous sustainability programmes initiated by multinational corporations. The current shortage has accelerated these initiatives. Regrettably, some of the programmes do not disclose their data, making it difficult for academics to access and analyse their information.

African governments have yet to address significant structural issues in their interventions.

How have cocoa farmers and cocoa-producing countries’ economies been affected?

At the farm level, although the rise in prices may initially appear beneficial to farmers, the reality is not straightforward. A decrease in output leads to fewer harvests on average, which means that, overall, farmers are not earning more. This issue is compounded by recent economic challenges in west Africa, such as high inflation and currency devaluation, particularly in Ghana. These factors have resulted in farmers becoming poorer.

Another impact of the output decline is a reduction in local processing. Major African processing facilities in Côte d’Ivoire and Ghana have either ceased operations or reduced their processing capacity because they cannot afford to purchase beans. This likely means that chocolate prices worldwide will surge. This, in turn, adversely affects the local production units that have been emerging in recent years.

However, the bargaining power of west African cocoa-producing countries seems to have increased. Now is an opportune moment for these nations to unite and negotiate more favourable terms for their cocoa farmers.

Will chocolate makers eventually turn to cocoa alternatives?

It’s inevitable because continuing to cultivate cocoa under current conditions is unsustainable. I don’t perceive this negatively; I hope it occurs sooner rather than later. In fact, it is already underway with the rise of cocoa butter equivalents, cocoa extenders and artificial flavours (synthetic or nature-identical flavours that mimic the taste of chocolate without the need for cocoa).

The German company Planet A Foods is a leader in this area. It produces cocoa-free chocolate, using technology to transform ingredients such as oats and sunflower seeds into substitutes for cocoa mass and butter.

Overall, this is beneficial for everyone. The demand for cocoa has resulted in mass deforestation and significant carbon emissions, issues that are likely to worsen due to climate change. Moreover, the push for cultivation has led to various forms of labour abuses. Exploring cocoa alternatives is certainly part of the solution.The Conversation

About the Author:

Michael E Odijie, Research associate, UCL

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Opinions Soft Commodities
16 Mar

Mexican Peso Speculator bets touching most bullish levels in 4 years

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday March 12th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Japanese Yen & British Pound

The COT currency market speculator bets were slightly higher overall this week as six out of the eleven currency markets we cover had higher positioning and the other five markets had lower speculator contracts.

Leading the gains for the currency markets was the Japanese Yen (16,521 contracts) with the British Pound (12,066 contracts), the EuroFX (8,096 contracts), the US Dollar Index (3,087 contracts),  the Brazilian Real (407 contracts) and Bitcoin (358 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Canadian Dollar (-11,037 contracts), the Australian Dollar (-6,097 contracts), the New Zealand Dollar (-4,763 contracts), the Mexican Peso (-2,294 contracts) and the Swiss Franc (-319 contracts) also registering lower bets on the week.

Speculators boosting Mexican Peso positions to best levels in 4 years

Highlighting the COT currency data this week is the continued strength in the Mexican peso positioning. Large speculators slightly trimmed (-2,294 contracts) their bullish bets for the Mexican peso this week but have been pushing their bets to multi-year highs over the past month.

Last week, on March 5th, the large speculator position rose by over +12,772 contracts and ascended to the most bullish level (+106,586 contracts) of the past 208 weeks, dating back all the way to March 10th of 2020. Since the beginning of November, speculators have increased their bullish bets in thirteen out of nineteen weeks and have added a total of +72,995 contracts to the overall net bullish standing, going from +31,297 contracts on October 31st to a total of +104,292 contracts this week.

Helping the Mexican peso positioning has been the record high interest rates in Mexico at 11.25 percent which gives the currency an interest rate differential advantage over the other major currencies. The Mexican economy has been on a steady growth path as well with the year-over-year GDP expanding by 2.5 percent in the 4th quarter following 3.5 percent growth in the third quarter of 2023 and 3.4 percent growth in the second quarter.

The Mexican peso exchange rate has been strongly trending higher in the currency markets versus the US Dollar and the other major currencies. The peso exchange level versus the US Dollar, on Thursday, reached its highest level since July of 2023 at just over the 0.0600 exchange rate. The peso has also been higher versus all of the other major currencies we track on a year-over-year basis.

The Bank of Mexico does meet on March 21st with a market expectation of a possible interest rate reduction — so we will see if the peso can continue to shine in 2024 following a great 2023 when the peso had an approximate gain versus the USD by a little over 14 percent.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (100 percent) and the Mexican Peso (99 percent) lead the currency markets this week. The New Zealand Dollar (67 percent), EuroFX (52 percent) and Bitcoin (51 percent) come in as the next highest in the weekly strength scores and above their midpoint (50 percent) of the last three years.

On the downside, the Australian Dollar (6 percent), the Swiss Franc (8 percent) and the US Dollar Index (18 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength score is the Japanese Yen (27 percent).

Strength Statistics:
US Dollar Index (17.9 percent) vs US Dollar Index previous week (11.4 percent)
EuroFX (52.0 percent) vs EuroFX previous week (48.6 percent)
British Pound Sterling (100.0 percent) vs British Pound Sterling previous week (92.0 percent)
Japanese Yen (27.0 percent) vs Japanese Yen previous week (12.3 percent)
Swiss Franc (8.1 percent) vs Swiss Franc previous week (9.1 percent)
Canadian Dollar (33.2 percent) vs Canadian Dollar previous week (42.4 percent)
Australian Dollar (5.6 percent) vs Australian Dollar previous week (11.2 percent)
New Zealand Dollar (67.4 percent) vs New Zealand Dollar previous week (80.9 percent)
Mexican Peso (98.7 percent) vs Mexican Peso previous week (100.0 percent)
Brazilian Real (45.8 percent) vs Brazilian Real previous week (45.2 percent)
Bitcoin (51.4 percent) vs Bitcoin previous week (46.1 percent)

British Pound & Mexican Peso top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the British Pound (24 percent) and the Mexican Peso (14 percent) lead the past six weeks trends for the currencies. The US Dollar Index (12 percent), the Bitcoin (12 percent) and the New Zealand Dollar (10 percent) are the next highest positive movers in the latest trends data.

The Swiss Franc (-41 percent) leads the downside trend scores currently with the Australian Dollar (-30 percent), Canadian Dollar (-24 percent) and the Japanese Yen (-19 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (12.3 percent) vs US Dollar Index previous week (3.1 percent)
EuroFX (-6.1 percent) vs EuroFX previous week (-9.4 percent)
British Pound Sterling (24.1 percent) vs British Pound Sterling previous week (17.9 percent)
Japanese Yen (-19.4 percent) vs Japanese Yen previous week (-42.8 percent)
Swiss Franc (-40.8 percent) vs Swiss Franc previous week (-36.2 percent)
Canadian Dollar (-23.9 percent) vs Canadian Dollar previous week (-9.6 percent)
Australian Dollar (-29.8 percent) vs Australian Dollar previous week (-28.0 percent)
New Zealand Dollar (9.9 percent) vs New Zealand Dollar previous week (25.5 percent)
Mexican Peso (14.0 percent) vs Mexican Peso previous week (18.4 percent)
Brazilian Real (-12.5 percent) vs Brazilian Real previous week (-20.1 percent)
Bitcoin (12.1 percent) vs Bitcoin previous week (4.7 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week totaled a net position of 6,186 contracts in the data reported through Tuesday. This was a weekly advance of 3,087 contracts from the previous week which had a total of 3,099 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 17.9 percent. The commercials are Bullish-Extreme with a score of 88.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:66.611.910.8
– Percent of Open Interest Shorts:43.136.110.1
– Net Position:6,186-6,381195
– Gross Longs:17,5473,1272,853
– Gross Shorts:11,3619,5082,658
– Long to Short Ratio:1.5 to 10.3 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):17.988.013.4
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.3-12.0-2.0

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week totaled a net position of 74,407 contracts in the data reported through Tuesday. This was a weekly increase of 8,096 contracts from the previous week which had a total of 66,311 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.0 percent. The commercials are Bullish with a score of 50.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.2 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.056.011.7
– Percent of Open Interest Shorts:16.770.67.5
– Net Position:74,407-104,60430,197
– Gross Longs:193,998402,08184,306
– Gross Shorts:119,591506,68554,109
– Long to Short Ratio:1.6 to 10.8 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):52.050.027.2
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.14.34.7

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week totaled a net position of 70,451 contracts in the data reported through Tuesday. This was a weekly increase of 12,066 contracts from the previous week which had a total of 58,385 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 1.5 percent and the small traders (not shown in chart) are Bullish with a score of 74.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:44.437.610.8
– Percent of Open Interest Shorts:19.066.07.8
– Net Position:70,451-78,9208,469
– Gross Longs:123,285104,33830,123
– Gross Shorts:52,834183,25821,654
– Long to Short Ratio:2.3 to 10.6 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):100.01.574.6
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:24.1-23.310.3

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week totaled a net position of -102,322 contracts in the data reported through Tuesday. This was a weekly lift of 16,521 contracts from the previous week which had a total of -118,843 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.0 percent. The commercials are Bullish with a score of 69.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.5 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:16.963.714.6
– Percent of Open Interest Shorts:48.333.713.2
– Net Position:-102,32297,8774,445
– Gross Longs:54,923207,47847,586
– Gross Shorts:157,245109,60143,141
– Long to Short Ratio:0.3 to 11.9 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):27.069.596.5
– Strength Index Reading (3 Year Range):BearishBullishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-19.415.312.9

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week totaled a net position of -17,870 contracts in the data reported through Tuesday. This was a weekly reduction of -319 contracts from the previous week which had a total of -17,551 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.1 percent. The commercials are Bullish-Extreme with a score of 88.9 percent and the small traders (not shown in chart) are Bearish with a score of 28.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.669.011.6
– Percent of Open Interest Shorts:35.334.224.8
– Net Position:-17,87028,703-10,833
– Gross Longs:11,23656,8859,575
– Gross Shorts:29,10628,18220,408
– Long to Short Ratio:0.4 to 12.0 to 10.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):8.188.928.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-40.851.5-34.2

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week totaled a net position of -30,874 contracts in the data reported through Tuesday. This was a weekly reduction of -11,037 contracts from the previous week which had a total of -19,837 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.2 percent. The commercials are Bullish with a score of 70.4 percent and the small traders (not shown in chart) are Bearish with a score of 24.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.659.015.6
– Percent of Open Interest Shorts:34.643.315.3
– Net Position:-30,87430,296578
– Gross Longs:35,964113,94230,149
– Gross Shorts:66,83883,64629,571
– Long to Short Ratio:0.5 to 11.4 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.270.424.1
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-23.921.5-13.3

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week totaled a net position of -90,840 contracts in the data reported through Tuesday. This was a weekly lowering of -6,097 contracts from the previous week which had a total of -84,743 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.6 percent. The commercials are Bullish-Extreme with a score of 90.6 percent and the small traders (not shown in chart) are Bearish with a score of 37.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.166.09.1
– Percent of Open Interest Shorts:57.623.512.1
– Net Position:-90,84097,678-6,838
– Gross Longs:41,591151,73120,858
– Gross Shorts:132,43154,05327,696
– Long to Short Ratio:0.3 to 12.8 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):5.690.637.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-29.829.7-15.9

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week totaled a net position of 2,465 contracts in the data reported through Tuesday. This was a weekly reduction of -4,763 contracts from the previous week which had a total of 7,228 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.4 percent. The commercials are Bearish with a score of 30.0 percent and the small traders (not shown in chart) are Bullish with a score of 78.3 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:31.150.18.9
– Percent of Open Interest Shorts:26.458.35.4
– Net Position:2,465-4,3371,872
– Gross Longs:16,39126,4084,700
– Gross Shorts:13,92630,7452,828
– Long to Short Ratio:1.2 to 10.9 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):67.430.078.3
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.9-9.97.0

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week totaled a net position of 104,292 contracts in the data reported through Tuesday. This was a weekly decline of -2,294 contracts from the previous week which had a total of 106,586 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 98.7 percent. The commercials are Bearish-Extreme with a score of 1.1 percent and the small traders (not shown in chart) are Bullish with a score of 52.8 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:54.639.72.8
– Percent of Open Interest Shorts:23.073.30.8
– Net Position:104,292-110,8106,518
– Gross Longs:180,140131,1449,172
– Gross Shorts:75,848241,9542,654
– Long to Short Ratio:2.4 to 10.5 to 13.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):98.71.152.8
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:14.0-14.17.6

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week totaled a net position of 8,687 contracts in the data reported through Tuesday. This was a weekly gain of 407 contracts from the previous week which had a total of 8,280 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.8 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bullish with a score of 58.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:53.339.67.1
– Percent of Open Interest Shorts:35.762.41.9
– Net Position:8,687-11,2532,566
– Gross Longs:26,31419,5323,502
– Gross Shorts:17,62730,785936
– Long to Short Ratio:1.5 to 10.6 to 13.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):45.852.058.3
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-12.511.64.1

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week totaled a net position of -994 contracts in the data reported through Tuesday. This was a weekly lift of 358 contracts from the previous week which had a total of -1,352 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.4 percent. The commercials are Bullish with a score of 66.2 percent and the small traders (not shown in chart) are Bearish with a score of 34.2 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:82.24.95.9
– Percent of Open Interest Shorts:85.44.72.8
– Net Position:-99459935
– Gross Longs:24,9771,4861,800
– Gross Shorts:25,9711,427865
– Long to Short Ratio:1.0 to 11.0 to 12.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):51.466.234.2
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.1-24.43.5

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

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