4 Aug 2015
GBP positioning reveals shorts are shrinking – Danske Bank
FXStreet (Edinburgh) - Analyst Kristoffer Lomholt at Danske Bank reviewed the last report from the IMM positioning.
Key Quotes
“IMM positioning data released on Friday revealed a continued shift in speculative GBP positioning as investors reduced their bearish positions vis-a-vis the USD for the second consecutive week”.
“Measured in percentage of open interest, last week’s change in GBP positioning was the largest single week’s short covering in over a year and has sent non-commercial sterling positioning to the 45th percentile – the least bearish level since November 2014”.
“The change reflects an improvement in UK data and not least recent hawkish comments from the Bank of England (BoE)”.
“Fundamentally, we still regard BoE to be ‘Fed light’ in the sense that we expect Governor Carney to postpone a rate hike until after the first Fed hike and the pace of UK rate normalisation to be slower. In light of the recent adjustment in positioning, we still regard the medium-term GBP/USD risk as skewed to the downside”.
Key Quotes
“IMM positioning data released on Friday revealed a continued shift in speculative GBP positioning as investors reduced their bearish positions vis-a-vis the USD for the second consecutive week”.
“Measured in percentage of open interest, last week’s change in GBP positioning was the largest single week’s short covering in over a year and has sent non-commercial sterling positioning to the 45th percentile – the least bearish level since November 2014”.
“The change reflects an improvement in UK data and not least recent hawkish comments from the Bank of England (BoE)”.
“Fundamentally, we still regard BoE to be ‘Fed light’ in the sense that we expect Governor Carney to postpone a rate hike until after the first Fed hike and the pace of UK rate normalisation to be slower. In light of the recent adjustment in positioning, we still regard the medium-term GBP/USD risk as skewed to the downside”.