In this week's Commitments of Traders Report, speculators continue to sell positions inversely correlated to the US dollar. As a proportion of total interest, the most meaningful declines this week were in the Swiss franc, British pound, and gold net positions. Other assets such as the euro, Canadian dollar, Australian dollar and crude oil also suffered from falling net speculator positions. As a result, the implied positioning in the US dollar rose by 2.7% this week. While speculators maintain a sizeable net short position in the US dollar, the “short USD” trade is suffering as the buck stages a comeback.

Looking at extremes in speculator positioning, net long positions in the Japanese yen are at a bullish extreme based on trailing 12-month averages. Net-long positions in crude oil are also at a bullish extreme based on trailing 36-month averages. Long British pound is no longer at an extreme.

The purpose of this weekly report is to track how the consensus is positioned across various major currencies and commodities. When net long positions become crowded in either direction, we flag extended positioning as a risk. Crowded positions do not suggest an imminent reversal, but should be considered as a significant risk factor when investing in the same direction as the crowd. This is shown below:

CFTC COT speculator positions (futures & options combined) – May 1, 2018

Source: CFTC, MarketsNow

Notable extremes, significant changes in weekly positions, and large net positions as a proportion of open interest are highlighted above. Extremes in net positions are highlighted when speculator positioning is more than two standard deviations above trailing 1-year and 3-year averages. Weekly changes are highlighted when they are significant as a proportion of open interest. Finally, net positions as a proportion of outstanding interest are highlighted when they are large relative to historical averages. 1-year and 3-year z-scores are visually represented below: