COT Report Reveals Shifts in Market Positioning Amid US Treasury Bond Buyback

The latest Commitment of Traders (COT) report from Saxo highlights significant changes in market positioning across various asset classes, driven by the US Treasury's bond buyback announcement and its aftermath.

Speculators reduced their aggregate dollar longs by $8.3 billion to $27.6 billion, with short covering in the euro, Canadian dollar, Swiss franc, and New Zealand dollar leading the decline. The yen saw continued selling, with speculators adding to their net short position as unfavourable US-Japan rate differentials limited its ability to benefit from broader dollar weakness.

In commodities, agriculture length surged at a record pace, with managed-money net longs across ten major grains and softs jumping by 546k contracts in just two weeks. Corn, sugar, cotton, and Kansas wheat saw multi-year positioning highs, while CBOT wheat remained net short despite an 11% price surge due to worsening Black Sea supply risks.

Metals and energy positioning diverged, with gold futures buying remaining restrained despite a 6.2% rally. Copper length eased from elevated levels, while speculators cut Brent longs by 11% as increased Hormuz flows reduced the Middle East risk premium.