Archive for Opinions – Page 78

19 Jul

Using green banks to solve America’s affordable housing crisis – and climate change at the same time

By Tarun Gopalakrishnan, Tufts University; Bethany Tietjen, Tufts University, and Seth Owusu-Mante, Tufts University 

Green banks are starting to draw attention in the U.S., particularly since the federal government announced its first grant competitions under a national green bank program to bring clean technology and more affordable energy to low-income communities.

But installing more solar and wind electricity generation isn’t the only way green banks can help.

Massachusetts is launching an innovative new green bank that could become a model as states try to manage two crises at once: lack of affordable housing and climate change.

While most green banks focus on clean energy, the Massachusetts Community Climate Bank is specifically designed to boost the state’s stock of sustainable, affordable housing. It comes at an opportune time: States can now tap into billions of dollars in new federal funding for green banks under the Inflation Reduction Act.

So what exactly is a green bank, and how might it work for sustainable housing?

What is a green bank?

Despite the name, green banks aren’t traditional banks. They function more like investment funds with a mission to promote sustainability.

Green banks are public, quasi-public or nonprofit entities that use public funds to encourage private investment in low-carbon, climate-resilient infrastructure.

By using innovative financing strategies, green banks can lower the risks for private investors to support projects, which reduces the amount of public money needed to reach government goals like expanding renewable energy or, in this case, affordable housing.

Green banks across the US

The U.S. had about two dozen green banks operating in early 2023 in at least 18 states and the District of Columbia – most of them focused on accelerating the transition from fossil fuel use to clean energy. And more were being developed.

In 2022, those banks used US$1.51 billion of public money to mobilize $3.12 billion in private investment. Since 2011, they have brought in a total of $14.8 billion.

Each bank is slightly different. Connecticut’s was the first state-run green bank in the U.S. It started with a renewable energy focus but expanded to include sustainable infrastructure, climate resilience, water, waste and recycling projects. Michigan created a nonprofit green bank called Michigan Saves that provides financing for energy efficiency. Hawaii’s state-run green bank boosts solar energy use.

At the local level, Maryland’s Montgomery County has been financing rooftop and community solar, energy efficiency and electric vehicle charging infrastructure through a green bank since 2016.

Finance New Orleans is a particularly instructive comparison – the 40-year-old housing finance agency recently transitioned to a climate-oriented business model to finance energy efficiency, stormwater management and green infrastructure projects for homeowners, businesses and local governments.

A green bank for sustainable housing

The new Massachusetts Community Climate Bank is solely dedicated to climate-friendly and resilient affordable housing to meet the goals of the state’s Climate Plan for 2050.

That might include upgrading insulation and windows in older housing complexes to make them less leaky on hot and cold days, transitioning to electric household appliances such as heat pumps or adding solar panels and electric vehicle chargers.

Residential buildings are one of Massachusetts’ largest sources of greenhouse emissions, accounting for 19% of the total. Making housing more sustainable would cut those emissions and also help cut emissions in other sectors. For example, rooftop solar panels can reduce the demand for electricity from natural gas-fired power plants, allowing the state to close the plants or run them less often.

The challenge is that the finance industry tends to view new technology and low-income households as risks.

Green banks are able to use public money to “de-risk” such investments. For example, they can lend at low rates to private or local lenders on the condition that they lend money at affordable rates for customers to electrify their heating. Other financial instruments include loan guarantees, securitization and co-investment.

Massachusetts’ green bank started with an initial $50 million in state funds, but it expects to grow by attracting both private investors and federal funding.

The timing is strategic. The Inflation Reduction Act, passed by Congress in 2022, includes funding for green banks. Among other commitments, it creates a $27 billion Greenhouse Gas Reduction Fund, $20 billion of which is earmarked to be awarded to nonprofits to invest indirectly in green projects through other local financing entities – including green banks.

Lessons from green banks around the world

The Climate Policy Lab at Tufts University, where we work as researchers, studies green banks around the world.

We have found that by following a few foundational principles, green banks can increase financing for climate priorities while remaining financially viable and without creating housing debt that owners can’t pay back. These organizations should:

  1. Have a clear, well-defined mission.
  2. Be profit-making, but not profit-maximizing.
  3. Address market gaps rather than competing with private investment.
  4. Be flexible enough to use a variety of financial instruments.
  5. Have an independent, stable and nonpartisan governance structure to ensure stability.

The Massachusetts green bank has a sector-focused mission that targets a market gap. Its focus on affordable housing could be clarified even more by tying it to the state definition of disadvantaged communities. The New York Green Bank does this by aiming to have $100 million – about 35% of its total – invested in green housing to benefit disadvantaged communities by 2025.

Focusing the Massachusetts bank’s climate mission will involve some tough decisions. For example, Connecticut’s Green Bank supports gas appliances above defined energy efficiency thresholds, but there is an argument for leapfrogging gas entirely to support the electrification of heating and cooking instead.

What else should green banks prioritize?

Reducing greenhouse gas emissions is important for curbing future climate change, but communities will also have to adapt to the climate impacts ahead.

The fact that the Massachusetts green bank is dedicated to affordable housing is already one adaptation. People who have homes are far more protected from climate impacts than those who do not. And if those homes are powered by clean energy with lower utility bills, low-income residents can more easily afford to cool their homes in extreme heat waves.

Green banks could also fund climate resilience, such as adding green spaces around buildings for natural cooling. Research shows that affordable housing in the United States is often in highly vulnerable locations, such as those at risk of flooding.

The Connecticut Green Bank, for example, is piloting “Property Assessed Resilience,” which allows homeowners to borrow for flood protection upgrades and benefit immediately from increased property valuations and reduced insurance premiums. They can repay over decades through modest increases in their property tax bills.

Focusing on the scarcity of affordable housing can reduce both emissions and socioeconomic inequity simultaneously. In our view, that is the holy grail of climate policy.The Conversation

About the Authors:

Tarun Gopalakrishnan, Research Fellow, Climate Policy Lab, Tufts University; Bethany Tietjen, Research Fellow in Climate Policy, The Fletcher School, Tufts University, and Seth Owusu-Mante, Research Fellow in International Development, Tufts University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Opinions
18 Jul

Earnings from ‘Magnificent Seven’ will determine stock markets’ path for 2023

By George Prior 

All eyes are on ‘The Magnificent Seven’ in this earnings seasons, with Tesla reporting on Wednesday, as these stocks will determine the market’s performance for the rest of this year and into 2024.

This is the assessment of Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, as Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms, all report Quarter 2 earnings in the next week or so.

He says: “Investors around the world will be pouring over the earnings and guidance reports of these major growth and tech names in the next few days.

“These mega cap companies’ values have jumped between 40% and 200% so far this year.

“These jumps have accounted for the bulk of the S&P 500’s 17% year-to-date advance and pushed-up the main stock market in the world’s largest economy to its highest level since April 2022.

“On the S&P 500, the seven stocks make up almost 30% of the index’s weight.

“Therefore, their earnings and guidance will, we expect, determine the market’s trajectory for the rest of this year and into 2024.”

The deVere CEO continues: “The Magnificent Seven are going to need robust earnings to explain their sky-high valuations.

“In addition, they will need the guidance to indicate future quarters to be higher than aniticpated for shareholders to receive additional gains. Should this not happen, we could see these stocks shed some of the advances.”

Tesla and Netflix will be the ones to watch on Wednesday. Microsoft and Meta are among those reporting next week.

Recently Nigel Green warned that the volume is “getting louder” and the “frenzy is reaching fever pitch” about the so-called Magnificent Seven stocks.

“This hype is dangerous as it could lead investors to assume that these stocks are a silver bullet to build long-term wealth – and they are not, at least not on their own.

“While I believe that exposure to these mega-cap tech stocks should be part of almost every investor’s portfolio, as they have robust fundamentals and are future-focused, especially in AI, they should not be exclusive.”

The deVere CEO concludes: “Such is their weight, the Magnificent Seven earnings we receive in the next week or so will set global investors’ portfolio positioning for the foreseeable future.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Opinions Stock Market News
17 Jul

What this year’s El Niño means for wheat and global food supply

By David Ubilava, University of Sydney 

The World Meteorological Organization has declared the onset of the first El Niño event in seven years. It estimates 90% probability the climatic phenomenon, involving an unusual warming of the Pacific Ocean, will develop through 2023, and be of moderate strength.

El Niño events bring hotter, drier weather to places such as Brazil, Australia and Indonesia, increasing the risk of wildfires and drought. Elsewhere, such as Peru and Ecuador, it increases rain, leading to floods.

The effects are sometimes described as a preview of “the new normal” in the wake of human-forced climate change. Of particular concern is the effect on agricultural production, and thereby the price of food – particularly “breadbasket” staples such as wheat, maize and rice.

El Niño’s global impacts are complex and multifaceted. It can potentially impact the lives of the majority of the world’s population. This is especially true for poor and rural households, whose fates are intrinsically linked with climate and farming.

The global supply and prices of most food is unlikely to move that much. The evidence from the ten El Niño events in the past five decades suggests relatively modest, and to some extent ambiguous, global price impacts. While reducing crop yield on average, these events have not resulted in a “perfect storm” of the scale to induce global “breadbasket yield shocks”.

But local effects could be severe. Even a “moderate” El Niño may significantly affect crops grown in geographically concentrated regions — for example palm oil, which primarily comes from Indonesia and Malaysia.

In some places El Niño-induced food availability and affordability issues may well lead to serious social consequences, such as conflict and hunger.

Impact on global food prices

The following graph shows the correlation between El Niño events and global food prices, as measured by the United Nations’ Food Price Index. This index tracks monthly changes in international prices of a basket of food commodities.

Despite the general inflationary pattern, there have rarely been big swings in El Niño years. Indeed, it shows prices decreasing during the two strongest El Niño episodes of the past three decades.

Other human-caused factors were at play – notably the Asian Financial Crisis in 1997, and the Global Financial Crisis in 2007-2008. In 2015, prices decreased due to stronger (than expected) supply and weaker demand, when the El Niño event did not turn out to be as bad as feared.

This all suggests that El Niño does not usually play the lead role in global commodity price movements.

Impacts on wheat supply

Why? Because El Niño does induce crop failures, but for food grown around the world the losses tend to be offset by positive changes in production across other key producing regions.

For example, it can bring favourable weather to the conflict-ridden and famine-prone Horn of Africa (Djibouti, Ethiopia, Eritrea and Somalia).

A good example is wheat.

The following chart shows how El Nino has affected Australian wheat production since 1980. In six out of nine El Niño events of at least moderate strength, production has dropped significantly – in four cases, at least 30% below the “trend line” (representing the long-term average).

Australia is one of the world’s top three wheat exporters, accounting for about 13% of global exports. So its production does affect global wheat prices. But in terms of total wheat grown it’s less significant – about 3.5% of world production. And El Niño-induced crop failures tend to be offset by production in other key wheat-producing regions.

The next graph compare changes in Australia’s wheat production with other significant wheat exporters in El Niño years. Dips in Australia’s production tend tend to be offset by changes elsewhere.

In 1994, for example, Australian wheat production dropped nearly 50% but barely changed elsewhere. In 1982, when Australian production dropped 30%, Argentina’s production was 50% higher. Such balancing patterns tends to be present across most El Niño years.

But some will bear the cost

That said, there will be at least some negative effects. Even if crop failures in one region are fully offset by rich harvests in others, some people are going to bear the costs of El Niño’s direct impact.

Australian farmers, for example, will be worse off if local wheat yields drop while global prices remain relatively stable.

Moreover, because most countries are connected via trade, El Niño will have wider economic impacts. It could still lead to deeper societal issues in some region, such as famine and agro-pastoral conflicts.

These effects may also be nuanced. For example, poor harvests in Africa may mitigate seasonal violence linked with the appropriation of agricultural surpluses. But considering other vulnerabilities around the world, the odds are that even a moderate El Niño will make already dire socio-economic conditions in some countries worse.

Most of the usual warnings about the caveats of climate change apply here. The difference, of course, is that all this is happening now.The Conversation

About the Author:

David Ubilava, Associate Professor of Economics, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Opinions Soft Commodities
17 Jul

Tesla’s New Competition

Source: Ron Struthers  (7/12/23)

Ron Struthers has followed Tesla since its infancy and says hydrogen fuel cells and vehicles will be the next big rage, and he sees huge growth in green energy transportation. Struthers discusses one company that he believes has lined up all the ducks in order to benefit.

I have followed Tesla since the early days, suggesting to buy or sell the stock numerous times. My last suggestion was a buy In January around $113. See my January Seeking Alpha article here, called “A Perfect Storm Hits Tesla in 2022.” I think the stock will test $300 so around $295 I will probably suggest selling.

The battery driven EVs have been all the rage with the “climate change” narrative; however, they are not a good enough solution. They are fine for commuters and those driving low daily mileage, but where they fail big time is higher mileage like the transport industry, as an example. A friend had a recent discussion with an Uber driver in Vancouver, Canada, about why he was not driving an EV. He said they are not practical because of battery charge life and long wait and charge times, especially in the colder months when the efficiency of the EVs drops -50% and more.

I did an in-depth article on the charging of EVs, the costs and efficiency. You will be surprised, so here a few tidbits from that analysis.

  • The average price to charge a 60-kilowatt-hour Tesla Model 3 at home is US$6.83, while it’s $8.88 for Volvo XC40 Recharge with a a 78-kWh battery pack and $14.92 for a Ford F-150 Lightning with its larger 131 kWh battery;
  • A big catch is that price is based on US$0.11 per-KWh. Where I am in Ontario the average is around Cdn $0.20. California is high at US$0.29 and the U.S. state average is US$0.16;
  • It will take a week to charge your EV at home unless you fork out about $2,000 to install a level 2 charger in your garage that will charge overnight in 8 to 12 hours, depending on battery size;
  • High-speed charging at Electrify America, meanwhile, costs something on the order of US$0.41 per kWh. Some Tesla Superchargers are charging as much as US$0.50 per kWh. That would mean your $6.83 at- home Tesla Model 3 charge would instead cost US$30, while that $14.92 Lightning fill-up jumps to $53.71;
  • The EVs mileage sucks big time in cold weather, so for almost half the year in Canada and northern US. Car.com did a road test with a Tesla Model Y and the range dropped over 50% at 0 to 5 degrees Fahrenheit.

I compared the fueling costs of a Tesla Model 3 with two other comparable luxury sedans, BMW 3 and the Jaguar XE. I used the EPA [Environmental Protection Agency] ratings on these cars. Plus you will pay a higher price for the Tesla and I did not include the cost of a Level 2 charger, so charging cost is at charging stations. I used $3 per gallon gasoline as that is about the current going rate where I am in Florida at that time.

Car                               Summer                                  Winter
Tesla Model 3            11.2 cents/mile                  15.8 cents/mile
BMW 3 Series (gas)  10.4 cents/mile                  10.4 cents/mile
Jaguar XE (gas)        10.4 cents/mile                  10.4 cents/mile

The battery technology has a long way to go yet. Weight of the batteries is another issue. I have seen estimates that one-third of the payload of a transport truck would have to be the batteries to move it. Hydrogen is going to be a much better solution in many cases and it is in it’s infancy like Tesla and EVs in the early days. There are numerous hydrogen test vehicles doing trials and there are few hydrogen filling stations like there were few charging stations six or seven years ago. The U.S. had about 3,000 charging stations in 2016 and 22,000 in 2021.

There are very few hydrogen stations, but they are coming. I saw news this week that a new one is being built at Toronto Airport. Geazone, a British Columbia courier company, recently ordered 40 Toyota Mirais because they are well served by four strategically located hydrogen refueling stations. The British Columbia government has committed $10 million to build more. Meanwhile, there are now some 47 hydrogen refueling stations in California.

Let’s compare hydrogen to batteries.

A modern car battery can store 250 watt-hours of energy for every kilogram of lithium-ion. A kilogram of hydrogen, meanwhile, has 33,200 of those watt-hour things per kilo. Yes, hydrogen is more than 100 times as energy-dense as a li-ion battery. The batteries will improve some but that won’t be much of a factor in this regard. Hydrogen vehicles will be far lighter than the battery-loaded EVs as well.

Hydrogen is only about 38% efficient versus 80% for lithium batteries The difference is in how the two process electricity. For hydrogen to be as emissions-free as a battery-powered car, you need to electrolyze the water — splitting H2O into, well, H2 and O — with clean wind, solar, or nuclear power. This electrolysis is not nearly as efficient as simply charging a battery. Similarly, in the fuel cell itself, the H2 and O must be recombined to generate electricity. This process, again, is not nearly as efficient as a battery dumping its electrons.

The newer electric cars are capable of achieving an 80% charge in around 30 minutes. However a fuel cell EV (FCEV) is like filling a gasoline car being fueled in under four minutes and can travel around 300 miles on a single tank. Hydrogen is a big winner here!

There are longer term environmental problems with EVs. Thousands of new mines will have to be built for battery metals. ln the Salar de Uyuni – the world’s largest salt flat and an enormous lithium reserve located in southwest Bolivia – mining is threatening to destroy the ecosystem and drain the water supply. Indeed, extracting just a tonne of lithium requires up to 2 million liters of water.

The sourcing of metals for lithium batteries can result in profound environmental damage and can produce as much as 16 tons of carbon emissions. For hydrogen it will be a matter of building green electrical plants to make the hydrogen. A lot of these will have to be built.

Currently less than 5% of EV batteries are being recycled; there is a substantial risk of environmental contamination relating to spent battery disposal. According to recent estimates, by 2030, the number of EV batteries requiring disposal will roughly equal the number currently produced annually. Most EV batteries have a 10-year warranty so that is an approximate lifespan. A hydrogen fuel cell will typically last the life of the vehicle and only require one small battery.

Summary

The biggest advantage for EVs is a lot more infrastructure is available while FCEV infrastructure is in its infancy. The EV electrical use is more efficient than FCEV but the recharging/fueling is a clear winner for FCEV. EVs have a lot of excess weight with batteries so the lighter FCEV could make up on its comparable electrical deficiency. The long-term environmental aspects of EVs have not been considered or have been ignored. FCEVs will play a big part in long haul transportation, taxis, service fleets, and last mile delivery.

The green hydrogen market was valued at US$676 million in 2022 and is projected to reach US$7,314 million by 2027, growing at a compound annual growth rate of 61% from 2022 to 2027. The market’s growth is attributed to the lowering cost of producing renewable energy by all sources, the development of electrolysis technologies, and high demand from FCEVs.

A recent report from the EIA [Energy Information Agency] shows very strong growth for hydrogen in FCEVs. Currently they are consuming less than 1% of the hydrogen market with the current big users being ammonia production and the others being methanol and steel production.

Hydrogen demand in road transport increases 60% in 2021 from 2020.

 

Heavy-duty hydrogen trucks increased significantly in 2021 (up over 60-fold from 2020).

I have talked about the technology “S curve” numerous times in the past. Once a technology reaches acceptance, and that is where FCEVs have just arrived, you have the strongest growth in the market. For example if the new technology has 5% of the market, the growth to 50% is a 1,000% increase. Currently FCEVs have less than 5% of the EV market.

A company I see as very well positioned for the development of hydrogen and FCEVs is:

First Hydrogen Corp. (FHYD:TSX; FHYDF:OTC; FIT:FSE) TSXV:FHYD OTC:FHYDF

Shares outstanding – 70 million approx.

First Hydrogen is based in Vancouver and London, UK, focused on zero-emission vehicles, green hydrogen production and distribution, and super-critical carbon dioxide extractor systems. The company has designed and built hydrogen-fuel-cell-powered light commercial demonstrator vehicles (LCV) under two agreements with AML Powertrain and Ballard Power Systems Inc. This graphic on their home page shows the FCEV and some bullet points.

 

These vehicles are currently being trialed with an initial 16 fleet operators in the United Kingdom.

On June 26, First Hydrogen’s FCEV was delivered to U.K. utility SSE PLC. The FCEV will begin real-world trials at SSE’s operational site at Aberdeen, Scotland, and surrounding areas, which features some of the U.K.’s best hydrogen infrastructure. This infrastructure will enable SSE to experience easy and fast refuelling within five to seven minutes, showcasing a significant advantage of the company’s FCEV over battery electric vehicles (BEV), which typically take hours to recharge.

The FCEV has some good reviews/praise such as in May from award-winning fleet management provider Rivus for its smooth and pleasant driving experience. Rivus drivers noted the capability to manage greater ranges and refuel much faster than battery electric vehicles, which will help fleets using this vehicle class to switch to meet zero emissions targets. Following initial journeys on roads in Birmingham, the West Midlands, and South Yorkshire, Rivus’ drivers have complimented the vehicle for its “effortless” and “comfortable” driving. Drivers were particularly impressed with the automatic transmission, which they appraised as “easier than a petrol or diesel van to operate” as it does not require gear changes and the vehicle is much quieter to run. Rivus, which manages approximately 120,000 vehicles, including approximately 85,000 LCVs, is the first fleet management company to test drive the first-of-its-kind hydrogen vehicle on U.K. roads.

The company has a very experienced and strong management team. FHYD is led by Malraj Mann, chairman and CEO, who has 40+ years of experience in corporate finance, acquisitions, and financial reporting for both private and public companies.

Rob Campbell is CEO-Energy with 40+ years engineering, commercial, and executive experience, including Chief Commercial Officer at Ballard Power Systems. He has held various previous leadership roles in energy and technology space (including solar and hydrogen).

Steve Gill is CEO- Automotive with 30+ years in automotive, with 20 years with Ford Motor Company (final role: Director, Powertrain Engineering at Ford of Europe); Board Director Ford Technologies; 11 years with Perkins Engines; (final role: Chief Engineer).

Allan Rushforth is CCO-Mobility with 30+ years in automotive and mobility. He has held senior leadership roles in automotive sales, distribution and service, including Marque Group, Lookers, Nissan, Hyundai and Volkswagen/Audi. International experience includes Japan, Korea, and Germany.

First Hydrogen is also active in Canada and has finalized land option agreements with the City of Shawinigan, Quebec. Next they signed a feasibility study agreement with Sacre-Davey for the development of a 35-megawatt green hydrogen production facility and vehicle assembly factory in Shawinigan. The purpose of the feasibility study is to establish the technical and market analysis, engineering review, analysis of grid and water constraints, permitting requirements, environmental constraints, and a review of distribution and operations. The overarching theme throughout the study is to recognize the combined aim to create a zero-emission hydrogen ecosystem.

The production facility will use advanced electrolysis and supply the company’s hydrogen-fuel-cell-powered vehicles (FCEV), as well as support other hydrogen-fueled vehicles and applications in the Montreal-Quebec City region. The company’s planned FCEV assembly factory will be designed for annual production of 25,000 vehicles per year when at full capacity and will represent a major boost to green technology jobs in the region. The distribution of First Hydrogen’s FCEV, throughout North America, will be in combination with the company’s hydrogen-as-a-service product offering.

It is very early days for First Hydrogen but it will have a far easier path than Tesla did. Tesla was met with much skepticism and doubt as North America’s first EV producer. Now governments and large investment funds are pouring oodles of money into the EV and hydrogen markets.

So far First Hydrogen’s FCEV has accumulated 6,000 kilometers on United Kingdom roads, including mileage around London’s M25 motorway. The data logging supports vehicle range simulations, which exceed a 500-kilometer range. The vehicle is currently performing with excellent efficiency, including both urban, extraurban (which includes driving at higher speeds), and highway operations. First Hydrogen’s LCV fuel consumption figures seen in many driving scenarios are under two kilograms per 100 km, and in mostly urban driving this is 1.5 kg/100 km.

Conclusion

First Hydrogen is at the very beginning of its growth cycle. It will have revenues from selling FCEVs that have now reached acceptance and I expect will soon see major purchase orders. The company has partnered with the Quebec University and numerous other government, investor, and industry partners in the sector. It is not doing this alone. First Hydrogen will also make revenues producing and selling hydrogen.

There is enormous government support for hydrogen in Western countries. In Canada’s recent budget, programs supporting First Hydrogen include investment tax credits for clean hydrogen ($17.7 billion) and zero-emission technology manufacturing ($11.1 billion), as well as lower tax rates for zero-emission technology manufactures ($1.3 billion). The federal incentives are in addition to incentive programs offered by the province of Quebec, which the company has picked for its first green hydrogen eco-system.

The stock ran up last year with good news from the company and Canada officially getting behind hydrogen. PM Justin Trudeau and German Chancellor Olaf Scholz met in Newfoundland, Canada, creating an alliance between Canada and Germany. The joint declaration of intent to invest in hydrogen and establish a transatlantic Canada-Germany supply corridor will be the start of establishing Canada as a significant hydrogen producer and advancing on its decarbonization path.

The stock has come down after what now looks like too much hype in the sector, but has put in a bottom and current prices look like an attractive entry point. There is not much resistance until around $3.40 and the the $4.00 area.

 

Important Disclosures:

  1. First Hydrogen has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Hydrogen.
  3. Ron Struthers: I, or members of my immediate household or family, does not own securities of First Hydrogen. My company does not have a financial relationship with First Hydrogen. I determined which companies would be included in this article based on my research and understanding of the sector.
  4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  5.  This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Struthers Resource Stock Report Disclosures

All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.

Opinions Stock Market News
15 Jul

British Pound Speculator bets jump to 15-year high as GBP closes above 1.30

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday July 11th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by British Pound & Brazilian Real

The COT currency market speculator bets were lower this week as five out of the eleven currency markets we cover had higher positioning while the other six markets had lower speculator contracts.

Leading the gains for the currency markets was the British Pound (7,798 contracts) with the Brazilian Real (2,094 contracts), Mexican Peso (926 contracts), Japanese Yen (738 contracts) and Bitcoin (221 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Swiss Franc (-4,503 contracts), the US Dollar Index (-2,306 contracts), EuroFX (-2,675 contracts), the New Zealand Dollar (-2,081 contracts), the Australian Dollar (-502 contracts) and the Canadian Dollar (-83 contracts)also registering lower bets on the week.

British Pound Speculator bets jump to 15-year high as GBP closes above 1.30

Highlighting the COT currency’s data this week is the bullish strength in the speculator’s positioning of the British Pound Sterling. Large speculative Pound positions rose this week by almost +8,000 contracts and have now increased their bullish positions in three out of the past four weeks.

The overall gain for the past four weeks now totals +51,328 contracts. This has pushed the overall net position, which currently sits at +58,063 contracts, to the highest speculator bullish standing since November 6th of 2007, an over 15-year high.

The Pound’s positioning has been helped out by the Bank of England’s most recent interest rate increase in June that was by 50 basis points and brought the bank rate to 5 percent – its highest sitting in the past 15 years as well. Traders are forecasting more rate hikes out of the UK due to high inflation while other countries, like the US, are likely nearing the end of a rate-rising cycle.

The Pound Sterling exchange rate against the US Dollar has been streaking higher this year and this week closed above the 1.3000 exchange rate for the first time since April of 2022. The GBPUSD currency pair had touched a low near 1.0360 as recently as September and has been on a strong uptrend since then. The GBPUSD has now risen by approximately 25 percent since that September bottom.

Data Snapshot of Forex Market Traders | Columns Legend
Jul-11-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
USD Index28,925612,01145-13,577541,56634
EUR736,05656140,16272-192,4622552,30062
GBP239,1256158,063100-72,701014,63887
JPY252,34979-117,1820129,07799-11,89529
CHF43,56348-7,907348,16558-25857
CAD140,395194,44459-14,026479,58244
AUD152,49542-45,0844354,03559-8,95131
NZD34,94720-1,251502,61953-1,36834
MXN239,7385196,16698-99,49323,32732
RUB20,93047,54331-7,15069-39324
BRL49,3633833,19878-31,19326-2,00528
Bitcoin16,30280-1,8554580401,05137

 

Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (100 percent) and the Mexican Peso (98 percent) lead the currency markets this week. The Brazilian Real (78 percent), EuroFX (72 percent) and the Canadian Dollar (59 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (0 percent) and the Swiss Franc (34 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the Australian Dollar (43 percent) and the Bitcoin (45 percent).

Strength Statistics:
US Dollar Index (45.0 percent) vs US Dollar Index previous week (48.8 percent)
EuroFX (72.4 percent) vs EuroFX previous week (73.4 percent)
British Pound Sterling (100.0 percent) vs British Pound Sterling previous week (94.4 percent)
Japanese Yen (0.4 percent) vs Japanese Yen previous week (0.0 percent)
Swiss Franc (33.7 percent) vs Swiss Franc previous week (45.6 percent)
Canadian Dollar (58.7 percent) vs Canadian Dollar previous week (58.8 percent)
Australian Dollar (43.0 percent) vs Australian Dollar previous week (43.5 percent)
New Zealand Dollar (50.2 percent) vs New Zealand Dollar previous week (55.8 percent)
Mexican Peso (97.8 percent) vs Mexican Peso previous week (97.3 percent)
Brazilian Real (78.0 percent) vs Brazilian Real previous week (75.3 percent)
Bitcoin (44.6 percent) vs Bitcoin previous week (40.7 percent)

 

British Pound & Canadian Dollar top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the British Pound (32 percent) and the Canadian Dollar (32 percent) lead the past six weeks trends for the currencies. The Mexican Peso (11 percent), the Brazilian Real (2 percent) and the US Dollar Index (-1 percent) are the next highest positive movers in the latest trends data.

The Bitcoin (-36 percent) leads the downside trend scores currently with the Swiss Franc (-20 percent), Japanese Yen (-12 percent) and the EuroFX (-10 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-1.3 percent) vs US Dollar Index previous week (5.1 percent)
EuroFX (-9.9 percent) vs EuroFX previous week (-11.9 percent)
British Pound Sterling (32.4 percent) vs British Pound Sterling previous week (27.9 percent)
Japanese Yen (-12.5 percent) vs Japanese Yen previous week (-22.1 percent)
Swiss Franc (-19.8 percent) vs Swiss Franc previous week (-6.6 percent)
Canadian Dollar (32.0 percent) vs Canadian Dollar previous week (49.5 percent)
Australian Dollar (-0.9 percent) vs Australian Dollar previous week (4.2 percent)
New Zealand Dollar (-3.0 percent) vs New Zealand Dollar previous week (3.2 percent)
Mexican Peso (11.1 percent) vs Mexican Peso previous week (11.2 percent)
Brazilian Real (2.4 percent) vs Brazilian Real previous week (-2.0 percent)
Bitcoin (-35.6 percent) vs Bitcoin previous week (-51.8 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week equaled a net position of 12,011 contracts in the data reported through Tuesday. This was a weekly decline of -2,306 contracts from the previous week which had a total of 14,317 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.0 percent. The commercials are Bullish with a score of 54.2 percent and the small traders (not shown in chart) are Bearish with a score of 33.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:71.78.814.9
– Percent of Open Interest Shorts:30.255.79.5
– Net Position:12,011-13,5771,566
– Gross Longs:20,7412,5364,316
– Gross Shorts:8,73016,1132,750
– Long to Short Ratio:2.4 to 10.2 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):45.054.233.6
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-1.34.3-21.1

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week equaled a net position of 140,162 contracts in the data reported through Tuesday. This was a weekly decline of -2,675 contracts from the previous week which had a total of 142,837 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.4 percent. The commercials are Bearish with a score of 25.4 percent and the small traders (not shown in chart) are Bullish with a score of 62.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:30.554.813.0
– Percent of Open Interest Shorts:11.481.05.9
– Net Position:140,162-192,46252,300
– Gross Longs:224,351403,46095,768
– Gross Shorts:84,189595,92243,468
– Long to Short Ratio:2.7 to 10.7 to 12.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):72.425.462.4
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-9.97.36.4

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week equaled a net position of 58,063 contracts in the data reported through Tuesday. This was a weekly boost of 7,798 contracts from the previous week which had a total of 50,265 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 86.7 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:46.730.616.7
– Percent of Open Interest Shorts:22.461.010.5
– Net Position:58,063-72,70114,638
– Gross Longs:111,66773,15039,825
– Gross Shorts:53,604145,85125,187
– Long to Short Ratio:2.1 to 10.5 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):100.00.086.7
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:32.4-33.924.8

 

Japanese Yen Futures:

The Japanese Yen large speculator standing this week equaled a net position of -117,182 contracts in the data reported through Tuesday. This was a weekly rise of 738 contracts from the previous week which had a total of -117,920 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.4 percent. The commercials are Bullish-Extreme with a score of 98.6 percent and the small traders (not shown in chart) are Bearish with a score of 29.3 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:11.875.411.6
– Percent of Open Interest Shorts:58.324.216.3
– Net Position:-117,182129,077-11,895
– Gross Longs:29,838190,18929,288
– Gross Shorts:147,02061,11241,183
– Long to Short Ratio:0.2 to 13.1 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.498.629.3
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-12.511.0-3.2

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week equaled a net position of -7,907 contracts in the data reported through Tuesday. This was a weekly decrease of -4,503 contracts from the previous week which had a total of -3,404 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.7 percent. The commercials are Bullish with a score of 58.5 percent and the small traders (not shown in chart) are Bullish with a score of 56.7 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:17.047.335.4
– Percent of Open Interest Shorts:35.228.636.0
– Net Position:-7,9078,165-258
– Gross Longs:7,41720,60415,411
– Gross Shorts:15,32412,43915,669
– Long to Short Ratio:0.5 to 11.7 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.758.556.7
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-19.810.92.8

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week equaled a net position of 4,444 contracts in the data reported through Tuesday. This was a weekly fall of -83 contracts from the previous week which had a total of 4,527 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.7 percent. The commercials are Bearish with a score of 46.6 percent and the small traders (not shown in chart) are Bearish with a score of 44.1 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:25.049.123.4
– Percent of Open Interest Shorts:21.859.116.6
– Net Position:4,444-14,0269,582
– Gross Longs:35,07268,93532,865
– Gross Shorts:30,62882,96123,283
– Long to Short Ratio:1.1 to 10.8 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):58.746.644.1
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:32.0-36.141.5

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week equaled a net position of -45,084 contracts in the data reported through Tuesday. This was a weekly decline of -502 contracts from the previous week which had a total of -44,582 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.0 percent. The commercials are Bullish with a score of 59.2 percent and the small traders (not shown in chart) are Bearish with a score of 30.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: New Buy – Long Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:28.657.410.7
– Percent of Open Interest Shorts:58.221.916.6
– Net Position:-45,08454,035-8,951
– Gross Longs:43,66187,45816,392
– Gross Shorts:88,74533,42325,343
– Long to Short Ratio:0.5 to 12.6 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):43.059.230.6
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.9-3.814.7

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week equaled a net position of -1,251 contracts in the data reported through Tuesday. This was a weekly lowering of -2,081 contracts from the previous week which had a total of 830 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.2 percent. The commercials are Bullish with a score of 52.7 percent and the small traders (not shown in chart) are Bearish with a score of 33.7 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:38.053.47.6
– Percent of Open Interest Shorts:41.645.911.5
– Net Position:-1,2512,619-1,368
– Gross Longs:13,29718,6662,656
– Gross Shorts:14,54816,0474,024
– Long to Short Ratio:0.9 to 11.2 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):50.252.733.7
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-3.03.4-3.6

 

Mexican Peso Futures:

The Mexican Peso large speculator standing this week equaled a net position of 96,166 contracts in the data reported through Tuesday. This was a weekly gain of 926 contracts from the previous week which had a total of 95,240 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 97.8 percent. The commercials are Bearish-Extreme with a score of 2.1 percent and the small traders (not shown in chart) are Bearish with a score of 32.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:51.344.83.5
– Percent of Open Interest Shorts:11.286.32.1
– Net Position:96,166-99,4933,327
– Gross Longs:122,996107,4918,414
– Gross Shorts:26,830206,9845,087
– Long to Short Ratio:4.6 to 10.5 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):97.82.132.4
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:11.1-9.8-10.8

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week equaled a net position of 33,198 contracts in the data reported through Tuesday. This was a weekly gain of 2,094 contracts from the previous week which had a total of 31,104 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 78.0 percent. The commercials are Bearish with a score of 26.3 percent and the small traders (not shown in chart) are Bearish with a score of 28.0 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:74.016.38.5
– Percent of Open Interest Shorts:6.879.512.6
– Net Position:33,198-31,193-2,005
– Gross Longs:36,5418,0704,213
– Gross Shorts:3,34339,2636,218
– Long to Short Ratio:10.9 to 10.2 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):78.026.328.0
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:2.45.0-47.7

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week equaled a net position of -1,855 contracts in the data reported through Tuesday. This was a weekly advance of 221 contracts from the previous week which had a total of -2,076 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.6 percent. The commercials are Bullish-Extreme with a score of 87.4 percent and the small traders (not shown in chart) are Bearish with a score of 36.8 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:75.68.29.4
– Percent of Open Interest Shorts:87.03.33.0
– Net Position:-1,8558041,051
– Gross Longs:12,3221,3431,535
– Gross Shorts:14,177539484
– Long to Short Ratio:0.9 to 12.5 to 13.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):44.687.436.8
– Strength Index Reading (3 Year Range):BearishBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-35.655.014.0

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.

 

COT Updates Forex and Currency News Opinions
15 Jul

COT Speculator Extremes: British Pound, Palladium lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on July 11th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table).

Here Are This Week’s Most Bullish Speculator Positions:

British Pound


The British Pound speculator position comes in as the most bullish extreme standing this week. The British Pound speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 32.4 this week. The overall net speculator position was a total of 58,063 net contracts this week with a change of 7,798 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Mexican Peso


The Mexican Peso speculator position comes next in the extreme standings this week. The Mexican Peso speculator level is now at a 97.8 percent score of its 3-year range.

The six-week trend for the percent strength score was 11.1 this week. The speculator position registered 96,166 net contracts this week with a weekly change of 926 contracts in speculator bets.

Live Cattle


The Live Cattle speculator position comes in third this week in the extreme standings. The Live Cattle speculator level resides at a 96.0 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 7.7 this week. The overall speculator position was 108,501 net contracts this week with a change of 3,058 contracts in the weekly speculator bets.

Cocoa Futures


The Cocoa Futures speculator position comes up number four in the extreme standings this week. The Cocoa Futures speculator level is at a 91.6 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 4.9 this week. The overall speculator position was 70,115 net contracts this week with a change of -2,469 contracts in the speculator bets.

Bloomberg Commodity Index


The Bloomberg Commodity Index speculator position rounds out the top five in this week’s bullish extreme standings. The Bloomberg Commodity Index speculator level sits at a 84.3 percent score of its 3-year range. The six-week trend for the speculator strength score was -15.0 this week.

The speculator position was -5,651 net contracts this week with a change of 95 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Palladium


The Palladium speculator position comes in as the most bearish extreme standing this week. The Palladium speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -18.5 this week. The overall speculator position was -8,272 net contracts this week with a change of -382 contracts in the speculator bets.

5-Year Bond


The 5-Year Bond speculator position comes in next for the most bearish extreme standing on the week. The 5-Year Bond speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -6.3 this week. The speculator position was -1,056,084 net contracts this week with a change of -26,270 contracts in the weekly speculator bets.

2-Year Bond


The 2-Year Bond speculator position comes in as third most bearish extreme standing of the week. The 2-Year Bond speculator level resides at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -8.8 this week. The overall speculator position was -1,071,700 net contracts this week with a change of -13,274 contracts in the speculator bets.

Japanese Yen


The Japanese Yen speculator position comes in as this week’s fourth most bearish extreme standing. The Japanese Yen speculator level is at a 0.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -12.5 this week. The speculator position was -117,182 net contracts this week with a change of 738 contracts in the weekly speculator bets.

1-Month Secured Overnight Financing Rate

Finally, the 1-Month Secured Overnight Financing Rate speculator position comes in as the fifth most bearish extreme standing for this week. The 1-Month Secured Overnight Financing Rate speculator level is at a 4.5 percent score of its 3-year range.

The six-week trend for the speculator strength score was -33.7 this week. The speculator position was -192,693 net contracts this week with a change of 13,807 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions
15 Jul

COT Bonds Charts: Weekly Speculator Changes led by 10-Year Treasury Bonds

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday July 11th and shows a quick view of how large traders (for-profit speculators and commercial hedgers) were positioned in the futures markets.

Weekly Speculator Changes led by 10-Year Treasury Bonds

The COT bond market speculator bets were lower this week as three out of the eight bond markets we cover had higher positioning while the other five markets had lower speculator contracts.

Leading the gains for the bond markets was the 10-Year Bonds (145,541 contracts) with the Ultra Treasury Bonds (17,660 contracts), the US Treasury Bonds (8,945 contracts) , and  also showing positive weeks.

The bond markets with declines in speculator bets for the week were the SOFR 3-Months (-203,437 contracts), the Fed Funds (-58,101 contracts), the 5-Year Bonds (-26,270 contracts), the 2-Year Bonds (-13,274 contracts) and the Ultra 10-Year Bonds (-8,572 contracts)also registering lower bets on the week.

Data Snapshot of Bond Market Traders | Columns Legend
Jul-11-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
SOFR-3-Months9,506,8639136,40283-14,93617-21,46676
FedFunds1,440,37041-164,85924184,51477-19,65552
2-Year3,678,629100-1,071,7000983,34110088,35997
Long T-Bond1,251,59263-130,98442101,6784729,30670
10-Year4,800,09194-635,13721636,94387-1,80673
5-Year5,257,885100-1,056,0840997,9449758,14097

 

Strength Scores led by SOFR 3-Months & US Treasury Bonds

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the SOFR 3-Months (83 percent) and the US Treasury Bonds (42 percent) lead the bond markets this week.

On the downside, the 5-Year Bonds (0 percent), the 2-Year Bonds (0 percent), the Ultra Treasury Bonds (7 percent) and the Ultra 10-Year Bonds (14 percent) come in at the lowest strength level currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Fed Funds (24.4 percent) vs Fed Funds previous week (33.5 percent)
2-Year Bond (0.0 percent) vs 2-Year Bond previous week (1.1 percent)
5-Year Bond (0.0 percent) vs 5-Year Bond previous week (2.3 percent)
10-Year Bond (20.9 percent) vs 10-Year Bond previous week (6.8 percent)
Ultra 10-Year Bond (14.2 percent) vs Ultra 10-Year Bond previous week (15.9 percent)
US Treasury Bond (42.0 percent) vs US Treasury Bond previous week (39.1 percent)
Ultra US Treasury Bond (7.3 percent) vs Ultra US Treasury Bond previous week (0.0 percent)
SOFR 3-Months (82.9 percent) vs SOFR 3-Months previous week (97.0 percent)

 

10-Year Bonds & Fed Funds top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the 10-Year Bonds (21 percent) and the Fed Funds (2 percent) lead the past six weeks trends for bonds.

The US Treasury Bonds (-23 percent) and the Ultra Treasury Bonds (-14 percent) lead the downside trend scores currently with the 2-Year Bonds (-9 percent) and the Ultra 10-Year Bonds (-8 percent) following next with lower trend scores.

Strength Trend Statistics:
Fed Funds (2.4 percent) vs Fed Funds previous week (-2.9 percent)
2-Year Bond (-8.8 percent) vs 2-Year Bond previous week (-14.5 percent)
5-Year Bond (-6.3 percent) vs 5-Year Bond previous week (-8.3 percent)
10-Year Bond (20.9 percent) vs 10-Year Bond previous week (-0.9 percent)
Ultra 10-Year Bond (-7.7 percent) vs Ultra 10-Year Bond previous week (3.7 percent)
US Treasury Bond (-23.1 percent) vs US Treasury Bond previous week (-31.5 percent)
Ultra US Treasury Bond (-13.7 percent) vs Ultra US Treasury Bond previous week (-17.2 percent)
SOFR 3-Months (-0.5 percent) vs SOFR 3-Months previous week (23.5 percent)

Secured Overnight Financing Rate (3-Month) Futures:

SOFR 3-Months Bonds Futures COT ChartThe Secured Overnight Financing Rate (3-Month) large speculator standing this week came in at a net position of 36,402 contracts in the data reported through Tuesday. This was a weekly lowering of -203,437 contracts from the previous week which had a total of 239,839 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 82.9 percent. The commercials are Bearish-Extreme with a score of 17.4 percent and the small traders (not shown in chart) are Bullish with a score of 76.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SOFR 3-Months StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:19.759.20.3
– Percent of Open Interest Shorts:19.359.40.5
– Net Position:36,402-14,936-21,466
– Gross Longs:1,871,7335,629,34928,673
– Gross Shorts:1,835,3315,644,28550,139
– Long to Short Ratio:1.0 to 11.0 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):82.917.476.1
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.50.9-3.6

 

30-Day Federal Funds Futures:

Federal Funds 30-Day Bonds Futures COT ChartThe 30-Day Federal Funds large speculator standing this week came in at a net position of -164,859 contracts in the data reported through Tuesday. This was a weekly fall of -58,101 contracts from the previous week which had a total of -106,758 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 24.4 percent. The commercials are Bullish with a score of 77.1 percent and the small traders (not shown in chart) are Bullish with a score of 52.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

30-Day Federal Funds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:4.073.72.1
– Percent of Open Interest Shorts:15.560.93.5
– Net Position:-164,859184,514-19,655
– Gross Longs:57,9051,060,99830,921
– Gross Shorts:222,764876,48450,576
– Long to Short Ratio:0.3 to 11.2 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):24.477.152.4
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:2.4-0.9-19.3

 

2-Year Treasury Note Futures:

2-Year Treasury Bonds Futures COT ChartThe 2-Year Treasury Note large speculator standing this week came in at a net position of -1,071,700 contracts in the data reported through Tuesday. This was a weekly decrease of -13,274 contracts from the previous week which had a total of -1,058,426 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.8 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

2-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:10.681.66.7
– Percent of Open Interest Shorts:39.754.94.3
– Net Position:-1,071,700983,34188,359
– Gross Longs:390,4693,003,415246,614
– Gross Shorts:1,462,1692,020,074158,255
– Long to Short Ratio:0.3 to 11.5 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.096.8
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-8.89.51.7

 

5-Year Treasury Note Futures:

5-Year Treasury Bonds Futures COT ChartThe 5-Year Treasury Note large speculator standing this week came in at a net position of -1,056,084 contracts in the data reported through Tuesday. This was a weekly reduction of -26,270 contracts from the previous week which had a total of -1,029,814 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 97.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 97.0 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

5-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:8.183.97.2
– Percent of Open Interest Shorts:28.264.96.1
– Net Position:-1,056,084997,94458,140
– Gross Longs:425,7794,410,220377,047
– Gross Shorts:1,481,8633,412,276318,907
– Long to Short Ratio:0.3 to 11.3 to 11.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.097.497.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.36.8-0.9

 

10-Year Treasury Note Futures:

10-Year Treasury Notes Bonds Futures COT ChartThe 10-Year Treasury Note large speculator standing this week came in at a net position of -635,137 contracts in the data reported through Tuesday. This was a weekly gain of 145,541 contracts from the previous week which had a total of -780,678 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.9 percent. The commercials are Bullish-Extreme with a score of 87.1 percent and the small traders (not shown in chart) are Bullish with a score of 73.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

10-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:10.879.18.1
– Percent of Open Interest Shorts:24.065.88.2
– Net Position:-635,137636,943-1,806
– Gross Longs:518,2053,797,358389,650
– Gross Shorts:1,153,3423,160,415391,456
– Long to Short Ratio:0.4 to 11.2 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):20.987.173.1
– Strength Index Reading (3 Year Range):BearishBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:20.9-12.9-20.4

 

Ultra 10-Year Notes Futures:

Ultra 10-Year Treasury Notes Bonds Futures COT ChartThe Ultra 10-Year Notes large speculator standing this week came in at a net position of -148,473 contracts in the data reported through Tuesday. This was a weekly decline of -8,572 contracts from the previous week which had a total of -139,901 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 14.2 percent. The commercials are Bullish-Extreme with a score of 85.2 percent and the small traders (not shown in chart) are Bullish with a score of 60.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Ultra 10-Year Notes StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:9.578.810.0
– Percent of Open Interest Shorts:18.065.115.2
– Net Position:-148,473238,401-89,928
– Gross Longs:165,4361,371,281174,306
– Gross Shorts:313,9091,132,880264,234
– Long to Short Ratio:0.5 to 11.2 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):14.285.260.6
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-7.714.6-17.9

 

US Treasury Bonds Futures:

US Year Treasury Notes Long Bonds Futures COT ChartThe US Treasury Bonds large speculator standing this week came in at a net position of -130,984 contracts in the data reported through Tuesday. This was a weekly boost of 8,945 contracts from the previous week which had a total of -139,929 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.0 percent. The commercials are Bearish with a score of 46.9 percent and the small traders (not shown in chart) are Bullish with a score of 69.7 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US Treasury Bonds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:6.278.414.4
– Percent of Open Interest Shorts:16.770.312.1
– Net Position:-130,984101,67829,306
– Gross Longs:78,154981,658180,701
– Gross Shorts:209,138879,980151,395
– Long to Short Ratio:0.4 to 11.1 to 11.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.046.969.7
– Strength Index Reading (3 Year Range):BearishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-23.131.9-13.4

 

Ultra US Treasury Bonds Futures:

Ultra US Year Treasury Notes Long Bonds Futures COT ChartThe Ultra US Treasury Bonds large speculator standing this week came in at a net position of -432,912 contracts in the data reported through Tuesday. This was a weekly advance of 17,660 contracts from the previous week which had a total of -450,572 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.3 percent. The commercials are Bullish-Extreme with a score of 89.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Ultra US Treasury Bonds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:5.482.811.4
– Percent of Open Interest Shorts:33.758.27.7
– Net Position:-432,912375,82857,084
– Gross Longs:82,0321,264,189174,380
– Gross Shorts:514,944888,361117,296
– Long to Short Ratio:0.2 to 11.4 to 11.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):7.389.491.1
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-13.717.7-0.5

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

Bonds COT Updates Opinions
15 Jul

COT Metals Charts: Weekly Speculator Changes led by Gold & Silver

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday July 11th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Gold & Silver

The COT metals markets speculator bets were lower this week as two out of the six metals markets we cover had higher positioning while the other four markets had lower speculator contracts.

Leading the gains for the metals was Gold (2,657 contracts) with Silver (2,302 contracts) also showing a positive week.

The markets with declines in speculator bets for the week were Palladium (-382 contracts), Platinum (-280 contracts), Copper (-2,395 contracts) and Steel (-71 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend
Jul-11-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
Gold483,17028165,75450-187,7495121,99535
Silver120,282620,29247-31,6495611,35729
Copper197,78541-11,157217,915783,24239
Palladium15,772100-8,27208,765100-49312
Platinum71,007727,78734-13,912656,12550

 

Strength Scores led by Steel & Gold

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Steel (73 percent) and Gold (50 percent) lead the metals markets this week. Palladium (0 percent) comes in as the next highest in the weekly strength scores.

On the downside, Copper (21 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Platinum (34 percent).

Strength Statistics:
Gold (50.0 percent) vs Gold previous week (48.9 percent)
Silver (47.2 percent) vs Silver previous week (43.9 percent)
Copper (21.2 percent) vs Copper previous week (23.3 percent)
Platinum (33.6 percent) vs Platinum previous week (34.2 percent)
Palladium (0.0 percent) vs Palladium previous week (3.2 percent)
Steel (72.6 percent) vs Palladium previous week (72.8 percent)

Copper & Steel top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (21 percent) and Steel (15 percent) lead the past six weeks trends for metals. Palladium (-18 percent) is the next highest positive mover in the latest trends data.

Gold (-2 percent) leads the downside trend scores currently with Platinum (-36 percent) as the next market with lower trend scores.

Move Statistics:
Gold (-1.6 percent) vs Gold previous week (1.0 percent)
Silver (-1.2 percent) vs Silver previous week (-5.7 percent)
Copper (21.2 percent) vs Copper previous week (18.2 percent)
Platinum (-36.0 percent) vs Platinum previous week (-44.8 percent)
Palladium (-18.5 percent) vs Palladium previous week (-21.7 percent)
Steel (14.8 percent) vs Steel previous week (15.0 percent)

Individual Markets:

Gold Comex Futures:

Gold Futures COT ChartThe Gold Comex Futures large speculator standing this week was a net position of 165,754 contracts in the data reported through Tuesday. This was a weekly lift of 2,657 contracts from the previous week which had a total of 163,097 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.0 percent. The commercials are Bullish with a score of 51.5 percent and the small traders (not shown in chart) are Bearish with a score of 35.1 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Gold Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:49.823.89.6
– Percent of Open Interest Shorts:15.562.65.1
– Net Position:165,754-187,74921,995
– Gross Longs:240,546114,79046,618
– Gross Shorts:74,792302,53924,623
– Long to Short Ratio:3.2 to 10.4 to 11.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):50.051.535.1
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-1.60.93.3

 

Silver Comex Futures:

Silver Futures COT ChartThe Silver Comex Futures large speculator standing this week was a net position of 20,292 contracts in the data reported through Tuesday. This was a weekly lift of 2,302 contracts from the previous week which had a total of 17,990 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.2 percent. The commercials are Bullish with a score of 55.5 percent and the small traders (not shown in chart) are Bearish with a score of 29.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Silver Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:42.731.819.4
– Percent of Open Interest Shorts:25.858.19.9
– Net Position:20,292-31,64911,357
– Gross Longs:51,30538,23823,304
– Gross Shorts:31,01369,88711,947
– Long to Short Ratio:1.7 to 10.5 to 12.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.255.529.4
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-1.23.5-11.5

 

Copper Grade #1 Futures:

Copper Futures COT ChartThe Copper Grade #1 Futures large speculator standing this week was a net position of -11,157 contracts in the data reported through Tuesday. This was a weekly decrease of -2,395 contracts from the previous week which had a total of -8,762 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.2 percent. The commercials are Bullish with a score of 78.2 percent and the small traders (not shown in chart) are Bearish with a score of 38.9 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Copper Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:30.043.78.8
– Percent of Open Interest Shorts:35.739.77.1
– Net Position:-11,1577,9153,242
– Gross Longs:59,38986,46617,338
– Gross Shorts:70,54678,55114,096
– Long to Short Ratio:0.8 to 11.1 to 11.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):21.278.238.9
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:21.2-21.811.4

 

Platinum Futures:

Platinum Futures COT ChartThe Platinum Futures large speculator standing this week was a net position of 7,787 contracts in the data reported through Tuesday. This was a weekly decrease of -280 contracts from the previous week which had a total of 8,067 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.6 percent. The commercials are Bullish with a score of 64.7 percent and the small traders (not shown in chart) are Bullish with a score of 50.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Platinum Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:54.327.213.2
– Percent of Open Interest Shorts:43.446.84.6
– Net Position:7,787-13,9126,125
– Gross Longs:38,59019,2949,369
– Gross Shorts:30,80333,2063,244
– Long to Short Ratio:1.3 to 10.6 to 12.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.664.750.0
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-36.029.120.7

 

Palladium Futures:

Palladium Futures COT ChartThe Palladium Futures large speculator standing this week was a net position of -8,272 contracts in the data reported through Tuesday. This was a weekly decrease of -382 contracts from the previous week which had a total of -7,890 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Palladium Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:22.762.39.6
– Percent of Open Interest Shorts:75.16.812.8
– Net Position:-8,2728,765-493
– Gross Longs:3,5759,8311,519
– Gross Shorts:11,8471,0662,012
– Long to Short Ratio:0.3 to 19.2 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.012.1
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-18.517.4-4.3

 

Steel Futures Futures:

Steel Futures COT ChartThe Steel Futures large speculator standing this week was a net position of -201 contracts in the data reported through Tuesday. This was a weekly decline of -71 contracts from the previous week which had a total of -130 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.6 percent. The commercials are Bearish with a score of 27.1 percent and the small traders (not shown in chart) are Bearish with a score of 40.2 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Steel Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:17.375.31.5
– Percent of Open Interest Shorts:18.275.10.8
– Net Position:-20146155
– Gross Longs:4,12417,946347
– Gross Shorts:4,32517,900192
– Long to Short Ratio:1.0 to 11.0 to 11.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):72.627.140.2
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:14.8-15.634.8

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Metals Opinions
14 Jul

Goodbye Dollar, Hello Gold

Source: Clive Maund  (7/13/23) 

Technical Analyst Clive Maund takes a look at the jump in the price of gold and the decline of the dollar.

Gold silver and precious metal (PM) stocks staged a major breakout yesterday as the dollar cratered to signal the onset of a major devaluation as its loss of reserve currency status becomes a physical reality. The BRICS are set to introduce an alternative CBDC related gold backed currency of their own that should drive the last nail into the dollar’s coffin. This has been “in the works” for quite a while and this being so it only is surprising that it has taken the dollar this long to break down. We saw all this coming a couple of weeks ago in the article PM SECTOR update – REVERSING TO UPSIDE and the two larger gold stocks featured in the article, Royal Gold and Victoria Gold have soared.

Anyway, the point is that the PM sector – and commodities generally – are embarking on a long and powerful upleg that is still in its earliest stages and this being so you can basically put on a blindfold and throw darts at a list of PM stocks and pick winners although of course we will strive to do somewhat better than that.

Now we will proceed to look at a range of charts showing the dollar breakdown and the PM sector breakouts yesterday that I am confident will “make your day” if you are long the PM sector…

We’ll start with the dollar which is of course the cause of the PM sector breakouts yesterday. The dollar cratered yesterday with a breathtaking 1.2% drop in the dollar index which broke it down from the bear Pennant it has been stuck in since late January.…


Meanwhile, the Canadian dollar, in common with many other currencies, broke higher against the US dollar yesterday, although as we can see, it had already started to break higher against the US dollar by the middle of last month. The Canadian economy is much more resource-based than the US and advancing metals prices should have a beneficial effect. Investors in Canadian mining stocks can therefore expect an additional benefit from relative currency appreciation, relative because all currencies are depreciating in real terms, if not against each other…


On gold’s 1-year chart we can see a quite lovely breakout yesterday from the corrective bullish Falling Wedge that brought it back to an important buy spot at the lower boundary of its larger uptrend channel and as we can clearly see, there is ample upside back up to the top of this channel – and there is nothing to say that, given the enormity of what is going on in the world, that it won’t in due course proceed to accelerate out of the top of this channel…


Silver had a big breakout yesterday too and although its uptrend is not yet as strong as gold’s as its larger uptrend channel is converging, it will probably proceed to rectify this in time by busting out of the top of this channel…


The chart for GDX (PM stocks) not surpringly looks very similar to gold and we can expect a robust by the sector as gold advances. Don’t worry about it having risen a lot yesterday – this chart shows that it has much further to go.


The chart for the Canadian dollar looks strong too, like it is breaking out upside from a long period of consolidation. Its chart will be added to this article later today, so look out for that.

Incidentally there are a string of big white candles in James Turk’s GoldMoney’s chart (XAU.TSX) over the past week, suggesting that investors of piling into physical gold.


Amongst stocks looking good this morning that we will be looking at ASAP are Sierra Madre Gold and Silver Ltd. (SM:TSX.V) that has positive news out this morning and Spey Resources Corp. (SPEY:CSE; SPEYF:OTC; 2JS:FRA) is at a very good entry point too. Away from the PM sector Muscle Maker Inc. (GRIL:NASDAQ) put in a reversal candle at strong support yesterday and looks set to advance.

Posted at 9.30 am EDT on 13th July 23 on CliveMaund.com.

Important Disclosures:

  1. Sierra Madre is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2.  Spey Resources and Muscle Maker have a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  3. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Spey Resources and Muscle Maker.
  4. Clive Maund: I, or members of my immediate household or family, own securities of: none. I personally am, or members of my immediate household or family are, paid by none. My company has a financial relationship with none. I determined which companies would be included in this article based on my research and understanding of the sector.
  5. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  6.  This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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CliveMaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Metals Opinions
14 Jul

Week Ahead: Can GBPUSD Bulls Maintain Hunger For Gains?

By ForexTime 

The explosive price action seen this week continues to highlight how global financial markets remain sensitive to key inflation data!

Currencies, commodities, and stocks were injected with fresh volatility mid-week after the softer-than-expected US inflation figures calmed fears around Fed rate hikes.

  • The US Dollar Index cut through the 100.70 support like a hot knife through butter and is currently on pace for its worst seek since November 2022.
  • Gold prices are trading back around the $1960 level, currently up roughly 1.6% this week.
  • Global stocks are set for their biggest weekly gain since November 2022, with the S&P500 hitting fresh 2023 highs.

Markets may be pumped with more volatility this afternoon due to earnings announcement by Wall Street banks.

And even before things settle down across the board, investors are already bracing for fresh action in the week ahead thanks to top-tier economic reports and key risk events…

Monday, July 17

  • CNH: China key policy rate decision, Q2 GDP, retail sales, industrial production
  • USD: US empire manufacturing

Tuesday, July 18

  • AUD: Reserve Bank of Australia July meeting minutes
  • CAD: CPI, housing starts
  • USD: US retail sales, industrial production
  • SPX500_m: Bank of America, Morgan Stanley earnings

Wednesday, July 19

  • EUR: June CPI (final)
  • GBP: UK June CPI
  • USD: US housing starts
  • SPX500_m: Goldman Sachs, IBM earnings
  • NQ100_m: Tesla, Netflix earnings

Thursday, July 20

  • CNH: China loan prime rates
  • AUD: Australia unemployment
  • EUR: Eurozone consumer confidence
  • USD: US initial jobless claims, existing home sales, University of Michigan Consumer Sentiment Index

Friday, July 21

  • CAD: Canada retail sales
  • JPY: Japan June CPI
  • GBP: UK Retail Sales, Gfk Consumer Confidence

Our focus falls on the GBPUSD which has resembled a speeding train gaining noticeable momentum on the technical charts!

After rallying to a fresh 2023 high at 1.3140 and rising more than 2% this week (as of writing), sterling bulls are certainly in the driving seat. Indeed, the GBPUSD has drawn strength from upbeat UK GDP data and a broadly weaker dollar.

The key question is whether bulls can maintain the appetite for further gains in the week ahead.

Here are 3 reasons why you should keep an eye on the GBPUSD:

  1. UK June Consumer Price Index (CPI)

On Wednesday, July 19th – the latest UK inflation report will be published.

All eyes will be on the incoming UK inflation report which could influence BoE hike expectations. This will be topped off with the latest retail sales figures and Gfk Consumer confidence report on Friday which could provide fresh insight into the health of the UK economy.

Markets are forecasting:

  • CPI year-on-year (June 2023 vs. June 2022) to cool 8.2% from 8.7% in the prior month.
  • Core CPI year-on-year to remain unchanged at 7.1% from 7.1% seen in May.
  • CPI month-on-month (June 2023 vs May 2023) to cool 0.4% from 0.7% in the prior month.

As of writing, traders are pricing in a 73% probability of a 50-basis point BoE hike in August as the central bank continues to battle sticky inflation.

  • Signs of still stubborn inflation may reinforce expectations around the BoE hiking rates by 50 basis points at its August meeting. This development could propel the GBPUSD beyond 1.3200.
  • Should June’s CPI report show signs of cooling inflationary pressures, this could fuel hopes around the BoE opting for a smaller 25 basis point hike in August. Speculation around the BoE slowing down the pace of rate increases may weaken the pound, dragging the GBPUSD back towards 1.3000.

  1. Dollar volatility

Fed hike expectations are likely to influence the US dollar in the week ahead. On top of this, investors will be dished out key US data which may provide fresh insight into the health of the largest economy in the world.

The US empire manufacturing will be under the spotlight on Monday, to key US retail sales and industrial production figures on Tuesday. Much attention will also be directed towards the US initial jobless claims and University of Michigan Consumer Sentiment Index on Thursday.

  • If US economic data disappoints, this could weaken the dollar as expectations mount over the Federal Reserve pausing rate hikes down the road. Dollar weakness is seen pushing the GBPUSD higher.
  • A strong set of economic releases may bolster the case for US rates remaining higher for longer. This is likely to strengthen the dollar, dragging the GBPUSD lower.

  1. Technical forces – bulls

The GBPUSD remains heavily bullish on the daily and weekly timeframe.

There have been consistently higher highs and higher lows in the weekly timeframe with prices slicing through the 200-week Simple Moving Average. Given how the currency pair remains in a healthy weekly bullish channel, the path of least resistance points north. A strong weekly close above 1.3200 may encourage an incline towards the next major resistance at 1.3700. While bulls are clearly in a position of power, the Relative Strength Index (RSI) has reached overbought levels. A technical throwback could be on the table before bull’s attack once again.

Zooming into the daily charts, the GBPUSD remains in a strong uptrend. After hitting a fresh 2023 high at 1.3140, the question is whether bulls have the appetite for more gains? A strong breakout above this point could encourage an incline towards 1.3200 and 1.3250. However, should prices slip back below 1.3000, this may trigger a further decline towards 1.2840.

Forex-Time-LogoArticle by ForexTime

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