Rates as of 0500 GMT

Market Recap

The FX market continues to reevaluate the prospects for CHF now that the Swiss National Bank SNB has started hiking rates.

The market has repriced the expected course of threemonth CHF rates. Investors now expect the SNB to hike faster higher than they expected before.

Because of that, the expected rate advantage that EUR holds over CHF has shrunk. This is supporting CHF today.

The Fench presidential election may also be a factor this morning. French President Macrons Ensemble party lost control of the National Assembly after a strong performance by NUPES, a newly formed alliance of leftwing parties, and the far right, which performed much better than expected. Ensemble remains the largest party with 245 seats but thats short of the 289 seats needed for a majority. Macron will now need to carry some other parties along if hes to deliver on his agenda, especially on such controversial policies as pension reforms. Its not going to be easy.

Elsewhere, commodity prices were falling on fears that the global trend toward higher interest rates will choke off growth. Thats the whole point of raising rates, isnt it? To bring demand into line with supply. This is weighing on AUD this morning.

Commitments of Traders CoT report

At first I thought there was something wrong with my spreadsheet because Id never seen such enormous changes in positioning in a week before. The enormous shift from long 50.5k EUR contracts to short 6.0k a…