From the FXWW Chatroom: FX markets seem to be in pensive mood judging by flow reports. Citibank’s latest G10 flows only show four currencies with more than 2% net weekly inflows or outflows. They were NZD, AUD, NOK and SEK. G3 flows were slow, EUR +1.3%, JPY -0.8% and USD 0.3%. Similarly the latest CFTC report showed five currencies positions that increased or decreased by more than 2%. GBP flipped from -300 to +4873 contracts and naturally jumped the most but at just -USD 300k isn’t meaningful. MXN +11.0%, JPY +10%, EUR +6% and NZD -5%. It’s always a tell-tale sign when a currency’s momentum drops and EUR inflows peaked on a 3-wk moving average basis on Nov 13. They’re now down to their lowest point in seven weeks. USD outflows on the same basis bottomed last week and are at their lowest ebb in a month. IMM G10 USD shorts jumped 33% last week and are out of step with Citibank’s flows. HSBC and Deutsche Bank research says IMM flows and spec flows have a high correlation. Something’s awry and someone’s going to get burned.
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