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This thread was started in response to the Analytic:
Speculators' Futures FX Positions
The weekly figures on traders' futures commitments obtained from the Chicago Mercantile Exchange's International Monetary Market shed valuable light on the developing flows pursuing one currency versus another.
Ashraf
Another point to note on Euro COT Chart seen buyers heading back.
June 20, 2010
Inflation or deflation?
For the last year and a half my assessment has been that the near-term pressures on the U.S. economy were deflationary, while long-term fundamentals involve significant inflation risks. It's time for a look at the data that have come in over the last 6 months, and time to say that I still see things exactly the same way.
The short-run deflationary forces come from the substantial underemployment of potentially productive labor and capital. I noted in January that, given the high unemployment rate at the time, a traditional Phillips Curve would predict deflation in the CPI over 2010-2011. Six months into the year, that's about how things have unfolded so far. The Bureau of Labor Statistics reported on Thursday that the seasonally adjusted consumer price index for May was at exactly the same value it had been in December.
Read more of this...........http://www.econbrowser.com/archives/2010/06/inflation_or_de.html
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These correlations are remarkable. Any sense of the causality? The speculators/traders understand the trends ahead of the market or the net position they take is enough to drive the market?
from my analysis of the chart it appears that cable speculators (non commercial) are at record net shorts since 04. The chart also shows that speculators anticipate moves in advance where large moves are due. So it will be quite interesting to see how thigs pan out. Lots of anaysts are expecting a short sqeeze here and a move higher in cable but they forget about fundamentals in UK being unfavourable at present. Both political and economically. I am more in favour of the speculators anticipating a huge drop i cable.
Euro, the RED GRAPH is LABELLED AS "CAD NET LONGS" with the ARROW POINTING TO THE LEFT, WHICH MEANS YOU HAVE TO SEE AT THE LEFT HAND SCALE I.E. OVER 28,421 contracts. people are net long CAD vs USD by 28421 contracts (see left hand scale of the char).
Ashraf