COT: Speculators bought dollars and sold bonds last week

The buying of dollars against ten IMM currency futures extended to a fourth consecutive week. Including the dollar index, the gross dollar long rose by $0.6 billion to $22.1 billion, a seven week high. Most noticeable sales were EUR and JPY while short-covering helped reduce bearish bets on GBP, AUD and NZD.

In EM currencies the weakest Brazilian Real on record helped drive the net short to the highest level since the contract was introduced in 2015. The MXN net long was reduced by 4% but at the equivalent of $3.3 billion it remained the second most popular long after the Greenback

Leveraged fund selling was seen across the US yield curved from Fed Funds futures to T Ultra Bonds. Measured as the dollar value of a one basis point move (DV01) the net short jumped by $21 million.

In stocks the Cboe VIX short was reduced for a second week. But interestingly the spike in volatility last Monday and especially Tuesday, when Trump talked about delaying the trade deal, only helped trigger a 5% reduction to 199,312 lots. While the short position (-16k) was reduced it was surprising to see the long position (-5k) being reduced as well.