Syrian Deal Sealed
The Syrian civil war will continue without direct US involvement for the coming months. The deal gives Syria until mid-2014 to remove or destroy chemical weapons. At the very least, this virtually eliminates the chance of a near-term strike which is more than enough to remove the risk premium in oil. Other risk assets are also likely to respond positively.
The focus now shifts to the Fed decision on Tuesday. The market has settled around a $10 billion taper but there is considerable uncertainty about messages on forward guidance and the path of the taper.
Commitments of Traders
Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.
EUR +13K vs +22K prior
JPY -95K vs -80K prior
GBP -38K vs -43K prior
AUD -60K vs -72K prior
CAD -31K vs -35K prior
CHF flat vs +1K prior
NZD flat vs flat prior
US Dollar Index longs at 21K vs 12K priorThe market was quick to flip the switch toward US dollar longs and reluctant to trim cable positions. However, later in the week there were clear signs of capitulation from the cable bears.
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