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Bonds News

UPDATE 1-Dollar longs slide, UK pound shorts hit record-high -CFTC, Reuters

(Adds details, quote, table)
    By Gertrude Chavez-Dreyfuss
    Aug 12 (Reuters) - Speculators reduced favorable bets on the
U.S. dollar for a second straight week, as investors remained
skeptical about whether the Federal Reserve would raise rates
this year despite a strong U.S. non-farm payrolls report last
month.
    The value of the dollar's net long position fell to $11.41
billion in the week ended Aug. 9, from $12.81 billion the
previous week, according to Reuters calculations and data from
the Commodity Futures Trading Commission released on Friday.
    "Latest U.S. data released today (weak retail sales, PPI
-producer price index) reinforce our belief that the Federal
Reserve will find it difficult to eke out more than one rate
hike this year, if at all, with a rising probability that the
pace of U.S. rate normalization thereafter will remain very
gradual," said Samarjit Shankar, global market strategist, at
BNY Mellon in Boston. 
    Fed funds futures late Friday saw just a 6 percent chance
the Fed would raise rates when it meets next month, down from 18
percent a week ago, according to the CME's FedWatch tool. For
the December meeting, the probability of a Fed hike was 43
percent, from about 47 percent last week.
    Analysts have said the Fed has not raised rates unless
market participants have priced in at least a 60 percent chance
in the month before it is expected to do so.
    So far this year, the dollar index has fallen 3 percent,
down form 2015's gains of more than 9 percent.
    Data further showed that sterling net short positions,
soared to 90,082 contracts this week, a record high. Speculators
have been short sterling since November last year.
    The pound has been pressured by actions of the Bank of
England last week when it cut interest rates and restarted bond
purchases in a move to mitigate the impact of Britain's vote to
exit the European Union.
    Analysts see further scope for sterling weakness. Since
Britain's vote on June 23, the pound has fallen more than 14
percent.
    Speculators, meanwhile raised net long positions on the yen
to 48,831 contracts, their highest in a month.
    BNY's Shankar said flows into the safe-haven yen have
remained buoyant the past month, having picked up last December
during a bout of global de-risking with worries about the
slowdown in China.
    The Reuters calculation for the aggregate U.S. dollar
position is derived from net positions of International Monetary
Market speculators in the yen, euro, sterling, Swiss franc and
Canadian and Australian dollars.
    
Japanese Yen (Contracts of 12,500,000 yen) 
 $-5.991 billion
         09 Aug 2016            Prior week
         week             
 Long             86,719            76,575
 Short            37,888            34,875
 Net              48,831            41,700
 
EURO (Contracts of 125,000 euros)
 $13.674 billion
         09 Aug 2016            Prior week
         week             
 Long            100,442           104,516
 Short           198,841           208,619
 Net             -98,399          -104,103
 
POUND STERLING (Contracts of 62,500 pounds sterling)
 $7.319 billion
         09 Aug 2016           Prior week
         week             
 Long             35,523           33,375
 Short           125,605          115,890
 Net             -90,082          -82,515
 
SWISS FRANC (Contracts of 125,000 Swiss francs)
 $-0.014 billion
         09 Aug 2016           Prior week
         week             
 Long             20,426           21,216
 Short            20,319           22,931
 Net                 107           -1,715
 
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
 $-1.172 billion
         09 Aug 2016           Prior week
         week             
 Long             43,647           41,711
 Short            28,281           23,953
 Net              15,366           17,758
 
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
 $-2.676 billion 
         09 Aug 2016           Prior week
         week             
 Long             59,586           58,269
 Short            24,702           26,906
 Net              34,884           31,363
 
MEXICAN PESO (Contracts of 500,000 pesos)
 $1.475 billion
         09 Aug 2016           Prior week
         week             
 Long             19,963           23,915
 Short            74,325           76,038
 Net             -54,362          -52,123
 
NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)
 $0.044 billion 
         09 Aug 2016           Prior week
         week             
 Long             28,314           27,049
 Short            28,927           26,832
 Net                -613              217
 
 (Reporting by Gertrude Chavez-Dreyfuss, editing by G Crosse and
Diane Craft)
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