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📝EMFX CTA Outflows Most Prevalent In Mexican Peso: UBS Strategy

There have been some very notable moves in CTA positioning in FX markets since Thursday, based on data from Rebecca Cheong and Megan Gordon. The largest swings follow some of the key flows seen in the market:

In G10, CHF has gained lots of attention given the franc safe-haven status. CTA positioning has gone net long 92%, up substantially from net short 9% on Thursday. EUR long positioning has increased to net 25% long. As short positioning in GBP was unwound in the market, CTAs turned long the pair and now sit net 8% long cable. CTAs have also turned their attention to JPY, increasing their positioning from short 33% to net long 8%. CAD remains the outlier short In G10 with CTA positioning net short 84%. AUD and NZD continue to be net shorted by CTAs vs USD, and this has extended to now lies net 50% and 33% short, respectively.

In EM, CTA outflows were most prevalent in MXN, which CTAs have been max long for nearly a month now. CTA positioning now lies net 50% long after some strategies were stopped out following the violent moves in MXN over the past 36 hours. CTAs exited BRL longs and now are flat BRL vs USD. HUF, another "EM darling," saw similar CTA outflows. Net positioning now lies long 33% (down from 75%). CZK and PLN have seen strong CTA Inflows since Thursday and positioning now is net long 58% and 50% respectively. CTA positioning in EM is now clearly In favor of CE3 currencies, followed by LatAm (mid-level longs), and EM Asia (net flat, slightly short). - UBS Strategy




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