Banda Asia: U.S. Bond Yields Fell, the U.S. Dollar Index Fell Slightly

On July 18, data showed that speculators had accumulated the most long positions in the pound since Brexit, but unchecked inflation and weak growth may mean that the pound’s carnival is not will continue.
Data from the Commodity Futures Trading Commission (CFTC) showed on Friday that speculators had a net long position on the pound of $4.7 billion as of July 11, the most since mid-2014, two years before the Brexit vote. That’s the largest net-long position since 2007 in futures contracts alone.
UK inflation has topped expectations for the past four months, sending the pound up 8% against the dollar this year, while inflation in the US has eased.
Wage growth in the UK topped 7% for the first time in May, prompting the BoE to surprise interest rates by 50 basis points in June.
Traders who had bet on the BoE ending its rate hikes in May now expect rates to rise above 6%.
Overall, however, hedge funds have been far more cautious in adding to their long positions in sterling.
Net leveraged players have cut their net long positions in sterling by about a third to about $2 billion since hitting a nine-month high in June, CFTC data showed.