Analysis Imm Positioning

As discussed in today's FOREXYARD Daily Analysis, overstretched market positioning has allowed for a bit of a EUR short squeeze on the back of a solid Spanish bond auction and strong US housing numbers. However, there are significant resistance barriers in the 1.3140 area. The most recent CFTC Commitment of Traders report shows speculators in the futures market have built their largest EUR short position since May 2010. As of last Tuesday speculators were holding -116k contracts short, up from -95k. The one sided positioning highlights the market's pessimism against the EUR but also brings the possibility of a short squeeze. Today's short squeeze has helped the EUR/USD rise as high as 1.3120. There is short term resistance in this area as the 200-hour moving comes in at 1.3135. Also ...

(Reuters) - Global sovereign wealth funds are set to hasten investing the billions of dollars of cash holdings they have built up in a rebound from the 2008 financial crisis that has lifted their combined assets to a record. But unlike three years ago, when they rode to the rescue of Wall Street titans such as Merrill Lynch and Citigroup, the investments this time around are seen mostly of a smaller nature and into the faster-growing sectors such as resources and infrastructure. "They may not be the headline-grabbing investments that we are used to seeing from the funds," said Rachel Zeimba, London-based senior research analyst at Roubini Global Economics. The funds have learnt bitter lessons from their plunge into the financial sector in the crisis, which wiped out billions from their ...

(Reuters) - The euro held steady on Tuesday, staying above a seven-week low hit the previous day, but downside risks persisted after its recent breach of a technical support level and due to the lingering possibility of further long liquidation. The euro also remains vulnerable due to concerns about the debt of peripheral euro zone countries, although it gained some reprieve on Monday after euro zone finance ministers approved an emergency loan program for Portugal. "It does seem like it (the euro) has stopped a little bit but it still looks heavy," said Koji Fukaya, director of global foreign exchange research at Credit Suisse Securities in Tokyo. "If we see a further drop in commodities, the euro could make a try for $1.40," Fukaya said, adding that some investors seem interested in ...

The Week Ahead Highlights * USD consolidates, while metals shine * Could peripheral concerns disrupt the ECB? * The Bank of England to keep cool on rates over the summer * SEK firms as Riksbank tightening expected to continue * The Aussie should continue to defy gravity * Key data and events to watch next week USD consolidates, while metals shine The US dollar managed to hold its ground against most other major currencies, and it still remains vulnerable, essentially consolidating near recent lows. Incoming US data over the past week suggest the US recovery is continuing, with strength in manufacturing as the lead driver. Renewed concerns over debt restructuring in the Eurozone re-surfaced, adding pressure to the EUR against most other currencies, and preventing ...

Weekly Market Commentary Overview Another nasty, jittery, week waiting for today's US employment figures; these disappointed badly as only 39K jobs were created and Unemployment rose to 9.8%, an increase of 276K people. Eurodollar money market futures yields eased on this and Euribor ones did too because the ECB extended its three-month tenders until the end of March; not much, but at least they held back from the liquidity withdrawl they have been threatening for ages. Treasury yields moved in the opposite direction, rallying to fairly key Technical levels and then pulling back, as something of a buyers' strike and need to dump dodgy paper took hold. Oblivious to this Germany's Dax managed a new high for this year at 6,977, as did Sweden's (1,147) while Mexico's set another new record ...

Weekly Market Commentary Overview A nasty, nervous, holiday-thin week as many institutions prepare to wind down for the year. Stock indices retreated, some for a third consecutive week, though Germany's Dax managed a new high for this year at 6,901 before pulling back and likewise Mexico's with a new record high of 37,153. Biggest losers Turkey (-8.00%), Spain (-7.50%), Ireland (-5.50%) and Italy (-5.0%) caused by debt problems (see below). With a 'flight to safety' frame of mind the US dollar gained against all others, Kiwi ($0.7479) and the Euro ($1.3200) the biggest losers and interestingly even the yen losing a little ground (84.08). Most government bonds saw a back-up in yields, Swiss benchmark ten-year to 1.68%, the highest since May, though Schatz ones dropped from 1.13% to 0.88% ...

Weekly Market Commentary Overview Treasury bond yields backed up again this week, a move which originated with JGB's early in October (benchmark ten-year 1.135% yesterday), ten-year US TNotes 2.968%, UK 3.446% and Australian ones 5.484%; ten-year Bund yields hit a three-month high at 2.723%, helping to keep peripheral EZ16 spreads just inside last week's records. A continuous stream of rumours and suggestions regarding Ireland and its banks has focused again on bailing out the indebted and/or over-leveraged by lending them more money; thoughts of contagion and coffers running dry have seen some query the authorities' tactics, demanding higher premiums on government debt. Stock indices were mixed, Germany's Dax inching up for a sixth consecutive week to a new high for this year at 6,849, ...

FX Strategy Weekly Market Outlook => Irish question remains centre stage for EUR => UK data and minutes this week may threaten positive GBP tone Rumours continue to fly around about the possibility of Ireland seeking aid from Europe, and many are speculating that something will emerge from the Euro-area finance ministers meeting on Tuesday, if not over the weekend. But the situation is hard to judge. While yield spreads have widened dramatically in the last couple of weeks, this is of little current concern to Ireland as they have no need to fund until the middle of 2011. So while it may well be the case that they are forced to access the EFSF (European Financial Stability Facility) when they need to issue debt next year, there is no obvious reason why they need to do so now. There are ...

Weekly Market Commentary Overview The US dollar recovered this week, admittedly from extreme levels against many, Scandinavian currencies and the Euro the biggest losers. This may be another symptom of sovereign debt troubles in the region, where ten-year Treasury spreads over Bunds hit new records: Ireland (705 basis points), Portugal (495), Spain (225) and Italy (180). LCH.Clearnet upped margins on Irish paper piling on the pressure and forcing some to ditch these same bonds to meet calls. This weekend's Kilkenomics festival, mixing economics and stand-up comedy in Kilkenny, has suggested a new body should rate Irish debt: 'Moody & Poor'. On FX moves several commodities retreated from recent highs, spot Silver from a 40-year high at $29.33 per ounce, in part because NYSE/LIFFE ...