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CFTC Weekly Update: FX Revulsion Continues As Bearish Bond Sentiment Moderates
Today's CFTC data reveals some interesting inflection points. First, looking at the perishables, there seems to be a resumption in bullish sentiment, especially in coffee and corn. This is to be expected as the last week saw an inflation scare which prompted many to expect a fresh rise in commodities (despite concerns of year-end profit taking which has materialized pretty much as anticipated in the year's best performing asset class - precious metals). Where things get more interesting is looking at the various parts of the Treasury curve: after 3 weeks of rather indiscriminate selling, net spec contracts in both the 2 Year and the 10 Year have seen a modest resumption in buying, although that previously most beloved part of the curve - the 5 Year is still unable to find a base. Although the 5 Year is still the only bond that has a net positive spec balance: all others are now negative. In other words, where we go from here is pretty much a crapshoot, as this is nothing more than a coincident indicator in the latest volatile asset. Lastly, looking at currencies, we see an interesting trend - after the USD saw a substantial pick up in the past two months as Europe faced its second sovereign bankruptcy (but has for now been buried under the rug), bearish sentiment is coming back again. Yet unlike before when there was a rather obvious inverse relationship between the EUR and the USD, this time the deterioration in USD sentiment has metastasized to the Yen, and the Euro (the CHF has been rather insulated, which is as expected, as the currency continues to to be the last ditch safety currency and thus less volatile to sovereign insolvency risks).
Treasurys:
Perishables:
FX:
And here are Libanman Futures' summary views of CFTC data in general and financial contracts.
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That 3-D chart yesterday of the yearly Bond Curve was "The Monkey's Uncle"!
http://www.zerohedge.com/article/treasury-curve-refresher
hey leave my family out of this
"silver and gold, silver and gold...means so much when I see! silver and gold decorations...on every Christmas Tree."
Now Burl Ives who was a Socialist may shoot me now.
http://lh5.ggpht.com/_wkgIzuqJM0w/TQEO2vh1_YI/AAAAAAAAHn4/7g3q4D6ASiA/s8...
Roger Waters is a socialist, but he gladly accepts $250 per ticket to see the 30 year old WALL by Pink Floyd.
In volatile economy, you don't trade the trend, the trend trades you.
"In other words, where we go from here is pretty much a crapshoot, as this is nothing more than a coincident indicator in the latest volatile asset."
No, it indicates that the next phase of induced supply chain collapse has begun.
Let us hope you are wrong.
Let us hope you are wrong.
Let us hope you are wrong.
Let us hope you are wrong.
sorry computer freeze! I forget not to keep hitting the return key.
I like this tyler durden better. He gives us data and sophisticated analysis. His alter ego just likes to stir up the latoc and mountain house crowd. My wife thought I was stupid when I bought two year's supply of coffee. This is a war you know (between us and the chinese currency peg). There will be collateral damage somewhere down the line, but a trader must have his cup of joe. If the supply chain gets a little tattered or if economic growth brings us two hundred million more coffee drinkers I should be ok. It seemed like a win win to me.
thx for the charts...luv it.
hmmm cocoa puffs
Looks like someone is putting the squeeze on Nat Gas? Meanwhile the majors are making billions in acquisitions?
http://www.zawya.com/story.cfm/sidZAWYA20101212105138/Big%20Oil%20and%20...