Notable shorts remain CHF and NZD, both near 40% of open interest. CHF short positioning plays into our reasoning of why the Swiss franc may serve as a better safe haven than JPY (“Is CHF the safest haven now”, 19 Jul 2018) given an increased prominence of Japanese pension funds in shifting cash back into foreign equities (“So, who is buying USD/JPY?”, 11 Jul 2018).
Although spec WTI positions have come in surprisingly unchanged, we note ICE Brent data shows a more significant reduction in net length from a peak of 484k contracts on 24 April to 214k net long contracts on 17 July. This more than halving of Brent net length puts positioning back towards neutral relative to the upward-sloping trend in net positioning since 2011. Spec gold positioning fell to the lowest level since Jan 2016 when gold traded 1080/oz.
We also note leveraged funds and asset managers are well-aligned in modest JPY short positioning, and quite heavy CHF short positioning, especially for asset managers for whom it is nigh on 90% of open interest. AUD and NZD shorts are also held in common between the two groups. Finally, leveraged funds made a sizable increase in RUB short positioning to 62% of open interest, a level not seen since Sep 2015.