COT Report Reveals Shifts in Speculative Positioning Ahead of Rate Hikes

The latest Commitments of Traders (COT) report shows a significant shift in speculative positioning across forex and commodity futures. In the week ending September 15, dollar bulls retreated ahead of the Federal Reserve's hawkish rate hike, slashing their gross dollar long by 70% to a 15-month low of $5.9 billion.

The yen saw a dramatic bullish shift, with speculators buying a record 216k contracts, equivalent to around $17.3 billion, lifting the net yen long to a 14-month high of 120k contracts. However, the timing proved challenging as USDJPY surged towards 158 after the Bank of Japan's rate hike.

In commodities, the energy sector saw a 9.4% surge, but hedge funds responded relatively cautiously, with some fresh buying of Brent crude while RBOB gasoline and ULSD contracts saw net selling.