Hedge funds have used the last week to again exit their favorite crowded trades. While Reuters may think that hedge funds are still bullish on peso and are maintaining their longs, the holdings in CFTC futures says otherwise. Yet again leveraged funds are cutting their long bets in MXN—longs in peso futures and options were slashed by 26 percent to 59,441 contracts between the period of June 5 to June 11 . This is now an almost 50 percent reduction in long bets in only two weeks—longs came up to 114,051 contracts until May 28.
At the same time hedge funds are also wrapping up the short positions in MXN futures—they were reduced to 26,197 positions from 36,732 a week ago.
Hedge Funds Go Long Euro
The other big change in investor sentiment is the stacking of longs in euro futures. Hedge funds took their bets on the rise of euro up to 60,210 contracts, a 71 percent increase from the previous week, the highest addition made in the past several months. EUR is going strong, up 3.4 percent against USD in the last 30 days. Meanwhile hedge funds covered another 15,089 shorts in EUR futures till June 11, taking their current short positions to 59,188 contracts.
Shorts in AUD were slightly increased over the week, now up to 79,016 contracts after taking in another 1179 positions. Shorts in JPY futures were decreased by 12 percent to 77,724 contracts, notably 2,986 long contracts were also initiated in past week.
While it was predicted by SocGen that shorts in Swiss franc will rise, we have not seen it happen yet. Hedge funds continued to pare bearish bets in CHF futures, exiting 4,308 contracts till June 11, now holding total 22,078 short contracts. As for the British pound, shorts in GBP futures were pulled back to 95,648 contracts from 110,135 a week ago. Even after the wrapping of short bets, GBP has the highest gross exposure among all currencies to bearish bets in terms of notional dollar value. Hedge funds increased longs in GBP futures by 27 percent to June 11.