Week Ahead Market Report: 7/2/2012

The first trading day of the week has investors wondering if last week’s strong rally will continue. Good morning, this is Sayoko Murase with the Week Ahead Market Report for July 2, 2012.

Interesting Forex & Related Links

By Zac, CountingPips.com

Quick links:

TradingFloor.comHow I use TradingFloor.com’s online FX tools for trading

One of TradingFloor’s forex analysts explains how he uses the site’s new FX Correlations tool.

LearnBonds.com – Looking to learn or better understand corporate bonds, treasury bonds, municipal bonds, etc? Look no further to see the latest news and information on these markets at Learnbonds.com

Tadawul FX Wins Best Broker Award at 2012 World Finance Foreign Exchange Awards – This broker, out of Cyprus & offering trading on the MT4 platform, was named Best Broker of Central & Eastern Europe at the recent World Finance Foreign Exchange Awards 2012. TadawulFX.com

TheStar.com.myChina plans test zone for yuan’s convertibility – China continuing to ease restrictions on the yuan and a further step to a freely trad-able currency


Forex: Currency Speculators increased US Dollar bets as Euro, Yen positions fell

By CountingPips.com

The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators added to their overall US dollar long positions last week while traders increased their short bets against the euro currency.

Non-commercial futures traders, including hedge funds and large speculators, raised their total US dollar long positions to $26.73 billion on June 26th from a total long position of $22.13 billion on June 19th, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

Individual Currencies:

EuroFX: Currency speculator sentiment for the euro decreased last week after rebounding sharply the previous week. Euro net short positions or bets against the currency increased to 159,880 contracts on June 26th from the previous week’s total of 141,066 net short contracts on June 19th. Euro positions had improved for two consecutive weeks and reached the best level since May 1 on June 19th before falling June 26th.



The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions improved last week for the second consecutive week after falling for the five previous weeks. British pound positions continued to be on the short side with a total of 758 net short contracts on June 26th following a total of 17,153 net short contracts the previous week. British pound positions had fallen for five consecutive weeks after peaking at their highest level in over a year on May 8th and fell over to the short side on June 5th.


JPY: Japanese yen speculative contracts declined for the first time in eleven weeks as Yen positions fell to a total of 4,542 net long contracts reported on June 26th following a total of 15,137 net long contracts on June 19th. Japanese positions have now continued to be positive on the long side for the fourth consecutive week after crossing over on June 5th.


CHF: Swiss franc speculator positions decreased sharply following an increase the previous week that brought franc positions to their best level since December 2011. Speculator positions for the Swiss currency futures registered a total of 23,836 net short contracts on June 26th following a total of 7,007 net short contracts as of June 19th.


CAD: Canadian dollar positions rebounded after declining for seven consecutive weeks. Canadian dollar positions edged higher to a total of 9,277 net long contracts as of June 26th following a total of 8,201 long contracts that were reported for June 19th. Canadian dollar contracts touched the highest level of the year on May 1st and then dropped for seven straight weeks before turning around.


AUD: The Australian dollar positions improved slightly after increasing sharply the previous week. Aussie positions improved to a total net amount of 2,159 short contracts on June 26th after rising to 3,458 net short contracts as of June 19th.


NZD: New Zealand dollar futures speculator positions improved for a third consecutive week and moved over to the long side. NZD contracts increased to a total of 576 net short contracts as of June 26th following a total of 2,213 net short contracts on June 19th. The kiwi contracts had been on the short side for five consecutive weeks before last week’s crossover.


MXN: Mexican peso speculative contracts increased for a third straight week after falling to yearly lows on June 5th. Peso positions rose to a total of 7,647 net short speculative positions as of June 26th following a total of 14,674 short contracts that were reported for June 19th. Mexican peso contracts on June 5th were at their lowest level since November 28th 2011 when positions equaled 36,240 short contracts.


COT Currency Data Summary as of June 26, 2012
Large Speculators Net Positions vs. the US Dollar

EUR -159880
GBP -758
JPY +4542
CHF -23836
CAD +9277
AUD -2159
NZD +576
MXN -7647