Note: This data marks the period ending Tuesday, April 4th.

EURUSD

Non-Commercials increased their net short positions in the Euro last week selling a further 4k contract to take the total position to – 11.4k contracts. The large EUR short position has been steadily reduced over the last six months as ECB easing expectations have faded and the Fed has disappointed USD bulls.

This week marks the official start of the French election campaign which is likely to direct EUR price action. The far-right candidate is widely expected to lose the campaign so any uptick in support for her, as shown via polls, is likely to weigh on EUR which should otherwise be supported by a victory for centrist candidate Macron.

On the data front this week, euro area industrial production is the only noteworthy release. On the US side, we have consumer and producer inflation, retail sales and U. of Michigan consumer confidence.

GBPUSD

Non-Commercials reduced their net short positions in Sterling last week buying 4.5k contracts to take the total position to – 100k contracts. Momentum has stalled in GBP as traders await the first official details regarding the Brexit negotiations which will be released following a summit at the end of the month.

Despite the triggering of Article 50, GBP has remained supported as data releases continue to suggest an increasing risk of the BOE tightening. On the data front this week we have seen another strong print for UK CPI which came in at 1.8% in March on the core print and 2.3% on the headline reading. Looking ahead we have labor market reports on Wednesday as well as a speaking event by BOE chief Carney.

USDJPY

Non-Commercials reduced their net short positions in the Japanese Yen last week buying 7k contracts to take the total position to -46k contracts. JPY has been steadily bought over the last three weeks as weak risk sentiment, softer US yields and increased geopolitical concerns have seen a safe-haven bid kick in.

The weaker US employment report and rising concerns following the US air strike on Syria are likely to keep JPY supported in the near term. On the data front, the focus will be on February machine orders and March corporate goods. Based on the BOJ’s March Tankan report released last week, CapEx is expected to be strong over Fiscal Year 2017.

USDCHF

Non-Commercials reduced their net short positions in the Swiss Franc last week buying 2.5k contracts to take the total position to -14k contracts. Despite the reduction in short positions, CHF has continued to weaken against the US Dollar over recent weeks. The SNB recently reiterated their message that they stand ready to act to prevent excessive CHF appreciation in the face of upcoming Eurozone political risk.

Comparing CHF price action to that of other safe haven assets such as JPY and Gold suggests that money managers are refraining from using CHF as their main safe haven. On the day after the UK voted to leave the EU, CHF rose less than 1% against the Euro while JPY and Gold both rose around 4% against USD.

AUDUSD

Non-Commercials reduced their net long Positions in the Australian Dollar last week selling 3.5k contracts to take the total position to -50k contracts. The loss of upward momentum in commodity prices has weighed on AUD recently with softness in, especially in iron ore, putting downward pressure on prices.

The RBA are expected to maintain a neutral bias as concerns regarding the level of household debt are tempering their desire to raise rates to cool the housing market. The latest NAB business conditions survey for March showed business conditions have now risen to their highest levels since before the global financial crisis. However, the business confidence survey was shown falling over the same period.

USDCAD

Non-Commercials increased their net short positions in the Canadian Dollar last week selling 2k contracts to take the total position to -30k contracts. The Canadian Dollar has been heavily sold over the last 5 weeks including the biggest position adjustment on record for CAD which saw 46k contracts sold in the week ending 21^st March.

Focus this week will be on the BOC who meet on Wednesday. The bank is largely expected to keep rates unchanged as recent data has been mixed and there are still concerns regarding the Canadian economy. Governor Poloz recently comments that raising rates prematurely would almost certainly cause a recession.