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Europe Pi Positioning Analysis PDF Here

• Structurally long positioning has evaporated across European futures contracts since the beginning of the year.
• At the start of 2025, Gilt and BTP had been in long territory but already showed signs of moving flat.
• Meanwhile, French contracts are even more clearly short than prior, while Germany remains flat/short.
• The most recent week of trade was indicative of short setting and long reduction across most Eurex contracts.

• Secured Overnight Financing Rate (SOFR): 4.34% (+0.00), volume: $2.338T
• Broad General Collateral Rate (BGCR): 4.32% (-0.01), volume: $899B
• Tri-Party General Collateral Rate (TGCR): 4.32% (-0.01), volume: $868B
• (rate, volume levels reflect prior session)

• Monday’s risk off session and the more optimistic tone for the US dollar today have prompted AUDUSD to extend its pullback this week. The pair has dropped 1.2% from last Friday’s close, keeping medium term bearish conditions intact.
• Recent gains stalled at resistance around the 50-day EMA (intersecting at 0.6325), and the subsequent reversal lower suggests the possible end of the correction between Jan 13 - 24.
• The NAB Business Survey report was out overnight and highlighted softer wage pressures, with labour cost growth at 1.4%, ahead of key quarterly inflation data scheduled on Wednesday that may prompt the RBA to consider rate cuts. Q4 CPI is expected to show a drop to 2.5% from 2.8% y/y prior. RBA-date OIS is pricing in an 80% chance of a 25bps cut at the Feb meeting, firming 2bps overnight.
• A continuation lower for AUDUSD would bring the focus back on 0.6131, the Jan 13 low and the bear trigger. On the upside, a clear breach of the 50-day average is required to signal scope for a stronger recovery.