9 Jul 2013
Flash: Summer lull looms for G3 – UBS
FXstreet.com (New York) - Despite two very meaningful central bank decisions, activity was muted and volumes have started to dry up as the summer months approach, note Analysts Geoffrey Yu and Gareth Berry at UBS.
Within the G3, the EUR/USD volume on a weekly basis was the lowest since the beginning of the year as hedge fund activity collapsed. The pair itself was net sold on the week with only asset managers expressing interest. Meanwhile, the USD/JPY unsurprisingly was net bought, mostly by hedge funds as other clients groups were largely unchanged in positioning.
“The BoE's surprisingly dovish statement caught hedge funds by surprise as they engaged in heavy selling on Thursday and Friday and they were joined by asset managers in smaller amounts.” The analysts add. Surprisingly, the private client community were on the bid throughout the week and managed to offset much of the liquidation flow.
In EUR/GBP however, it was largely one-way as institutional and corporate clients led the purchases of euros against sterling, while private clients were flat. The franc also had a tough week: asset managers bought USD/CHF and EUR/CHF, and while hedge funds managed to take some profit on EUR/CHF, they added fresh longs in USD/CHF. Private clients also bought EUR/CHF for the 11th straight week.
Within the G3, the EUR/USD volume on a weekly basis was the lowest since the beginning of the year as hedge fund activity collapsed. The pair itself was net sold on the week with only asset managers expressing interest. Meanwhile, the USD/JPY unsurprisingly was net bought, mostly by hedge funds as other clients groups were largely unchanged in positioning.
“The BoE's surprisingly dovish statement caught hedge funds by surprise as they engaged in heavy selling on Thursday and Friday and they were joined by asset managers in smaller amounts.” The analysts add. Surprisingly, the private client community were on the bid throughout the week and managed to offset much of the liquidation flow.
In EUR/GBP however, it was largely one-way as institutional and corporate clients led the purchases of euros against sterling, while private clients were flat. The franc also had a tough week: asset managers bought USD/CHF and EUR/CHF, and while hedge funds managed to take some profit on EUR/CHF, they added fresh longs in USD/CHF. Private clients also bought EUR/CHF for the 11th straight week.