What the big Prime Brokers are reporting..
Not much is the short answer, though it seems many of the big hedge funds are quite neutrally positioned and are keen to get involved again:
- Short AUD is the favourite play for exactly the same reasons that I’m short, namely indecisive price action post-Fed, a stuttering Chinese economy, interest rates about to be dropped by 50bps and the RBA selling into rallies. Interestingly one PB says that their big accounts haven’t really sold yet as they are nervous about buying USD with infinite QE looming.
- One interesting fact is that long GBP positioning amongst big hedge funds is at near 4-year highs but general market positioning is almost neutral.
- Professional market is still quite short of EUR and short of CHF as well.
- There has been some demand today for short-term USD/JPY out-of-the-money calls in the hope (forlorn?) of actual intervention before month’s end.
- Amongst the emerging Asian currencies, selling USD/INR and USD/MYR seem to be the favoured strategies.