Commodities: CFTC Weekly Report Rates, FX and Commodities Strategy 5 January 2018 TD Securities Toronto

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Brent Wilkinson
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Rates, FX and Commodities Strategy CFTC Commitment of Traders Report for the Week Ending January 0, 08 Gold specs increased their net length, as traders aggressively added to their longs while shorts

1 Rates, FX and Commodities Strategy CFTC Commitment of Traders Report for the Week Ending January 0, 08 Gold specs increased their net length, as traders aggressively added to their longs while shorts only modestly increased their positions. Market participants are increasingly unconvinced that Trump's tax reform will be inflationary, implying that stillmuted inflation will not entice the Fed to raise rates in accordance with their dot plots, thereby keeping the cost of holding nonyielding precious metals low. This, along with a weakening dollar, and increasing geopolitical tensions in Washington, North Korea, Iran and the Middle East have prompted gold prices to shoot out of their previously narrow range, thrusting through the $,300/oz upper bound just ahead of the year's end. WTI crude specs continued to increase net length again this week as more shorts were forced to cover in comparison to profit takers. Prices held firm above $60/bbl even as pipeline issues in the North Sea and Libya alleviated, as protests in Iran raised fears that the US could bring new sanctions and hamper their output. This latest bout of geopolitical tensions in the Middle East saw WTI touch as high as $6./bbl, but as these tensions ease, we expect some length may be reduced and prices could retreat slightly. Overall, however, crude should remain strong as inventories continue to drain amid OPEC cuts and only moderate shale growth. Natural gas specs increased length on the week after a bout short covering, in anticipation of extreme cold hitting the Eastern United States. Henry Hub prices topped $3/MMBtu once again as freezing temperatures increased heating demand expectations, while the bitter cold also affected production as freezeoffs halted supply. But this increased length was likely short lived as Thursday's EIA storage report showed that inventories drew less than expected during the cold spell. Meanwhile, medium to longer term weather forecasts also flipped warmer, sending prices down to as low as $.746/MMBtu on Friday. In the short term, prices will continue to fluctuate on volatile weather forecasting, but longer term, low inventory levels and strong demand should see prices improve. Weekly CFTC Commitment of Traders Report (January, 08) Net NonCommercial Position Net NonCommercial Position (% of Open Interest) Futures Change Futures & Options Change Futures Change Futures & Options Change WTI + Brent Crude Oil,07,38 (3,88),6,859 (,878) WTI + Brent Crude Oil 9.3% 0.% 6.% 0.0% WTI Crude Oil 668,086,509 76,60,845 WTI Crude Oil.8% 0.% 8.4% 0.3% Brent Crude Oil 403,05 (6,390) 400,49 (4,73) Brent Crude Oil 6.% 0.% 3.% 0.% Natural Gas 0,8,539 37,600 9,948 Natural Gas 0.5% 0.3% 0.% 0.3% RBOB Gasoline 84,34,437 85,60,48 RBOB Gasoline.9% 0.9%.% 0.9% Heating Oil 63,65 6,09 66,58 6,049 Heating Oil 4.3%.4% 4.%.3% Gold 63,68 7,30 7,0 33,8 Gold 3.6%.8% 4.9%.6% Silver,750 8,0,53 8,968 Silver.8% 9.5% 0.7% 9.0% Platinum 7,45,0 9,048,734 Platinum.3%.3%.7%.9% Palladium 7,037,539 7,3,487 Palladium 70.9% 0.9% 68.6% 0.3% Copper 63,9 0,643 6,856 0,5 Copper.%.3%.5%.% S&P 500 (788) (3,030) (,855) (,53) S&P 500.5% 5.9%.9%.6% Canadian Dollar 4,739 (,607) 4,546 (,938) Canadian Dollar.6% 3.3% 9.9% 3.% Euro 7,868 35,70 30,55 4,94 Euro 3.6% 5.% 0.6% 5.% U.S. TNotes, 0yr (75,840) 7,86 (5,883) 5,344 U.S. TNotes, 0yr.3% 0.%.4% 0.4% Long NonCommercial Position Short NonCommercial Position Futures Change Futures & Options Change Futures Change Futures & Options Change WTI + Brent Crude Oil,06,04 (3,407),93,697 (8,556) WTI + Brent Crude Oil,034,903 (9,56),66,838 (6,678) WTI Crude Oil 87,88 (5) 876,77 (,59) WTI Crude Oil 03,795 (3,03) 49,567 (4,437) Brent Crude Oil,34,60 (,885),47,50 (6,964) Brent Crude Oil 83,08 (6,495),07,7 (,4) Natural Gas 677,475 (38,88) 774,763 (3,03) Natural Gas 575,654 (50,4) 637,64 (3,979) RBOB Gasoline 56,5 5,36 55,986 5,4 RBOB Gasoline 7,80 3,799 70,376 3,743 Heating Oil 4,84 9,3 40,87 8,978 Heating Oil 77,53 3,03 74,353,99 Gold 4,48 38,838 46,679 4,49 Gold 78,60,58 74,658 9,9 Silver 75,7,4 74,746,7 Silver 5,377 (6,988) 5,33 (6,796) Platinum 5,4 (,478) 5,94 (,78) Platinum 33,87 (3,580) 33,46 (3,9) Palladium 3,360,403 3,66,309 Palladium 4,33 (36) 4,43 (78) Copper 50,4 3,35 49,60 3,7 Copper 86,9,68 86,746,76 S&P 500,878 (,540) 3,564 (836) S&P 500 3,666,490 5, Canadian Dollar 49,97 6,95 48,6 6,6 Canadian Dollar 34,558 9,53 33,680 9,064 Euro 36,808 7,895 36,67 33,630 Euro 08,940 (7,85) 06,47 (8,3) U.S. TNotes, 0yr 660,45 4,3 653,70 4,506 U.S. TNotes, 0yr 736,085 6, ,584 9,6 Contract specifications: Crude Oil 000 bbl; Nat Gas* 0,000 MMbtu; Gasoline 4,000 gal; Heating Oil 4,000 gal; Gold 00 oz; Silver 5000 oz; Platinum 50 oz; Palladium 00 oz; Copper 5,000 lbs; Wheat, Corn Soybeans 5000 Bushels; S&P 500 $50 X S&P 500; Canadian $ C$; Euro 5,000 Note: Positions reflect available data as of Friday. ICE futures data lag NYMEX data by one week; Natural Gas ICE futures (,500 MMbtu) are adjusted :4 to reflect contract size of NYMEX (0,000 MMbtu) Source: Bloomberg, CFTC, TD Securities Disclaimer: This report is a marketing communication. It has not been prepared in accordance with legal requirements, as outlined in the UK FCA s COBS, designed to promote the independence of investment research and is also not subject to any prohibition of dealing ahead of the dissemination of investment research, although as a matter of policy TD Securities requires its employees not to deal ahead of the dissemination of this report.

2 CFTC Metals Charts Net 3 COMEX Gold Gold Net Spec Position (lhs) Gold Price (rhs) $UD/oz,700,600,500,400,300,00,00, COMEX Gold Long Gold Short Gold Net COMEX Silver $UD/oz 35 COMEX Silver Silver Net Spec Position (lhs) Silver Price (rhs) Long Silver Short Silver Net 30,000 0,000 NYMEX Platinum Platinum Net Spec Position (lhs) Platinum Price (rhs) $UD/oz,800,700,600,500,400,300,00,00, ,000 30,000 0,000 NYMEX Platinum Long Platinum Short Platinum

3 Net 35,000 NYMEX Palladium $UD/oz,000 NYMEX Palladium 30,000 5,000 5,000 0,000 5, ,000 30,000 5,000 5,000 0,000 5, Palladium Net Spec Position (lhs) Palladium Price (rhs) Long Palladium Short Palladium Net () () () COMEX Copper Copper Net Spec Position (lhs) Copper Price (rhs) $UD/lb COMEX Copper Long Copper Short Copper 3

4 CFTC Energy Charts Net 800, , ,000 Net 4 3 () () () NYMEX & ICE WTI Crude Oil WTI Net Spec Position (lhs) NYMEX & ICE Brent Crude Oil WTI Price (rhs) $UD/bbl $UD/bbl ,000, , , , ,000,,000, ,000 NYMEX & ICE WTI Crude Oil Long WTI Short WTI NYMEX & ICE Brent Crude Oil Brent Net Spec Position (lhs) Brent Price (rhs) Long Brent Short Brent Net NYMEX Gasoline Gasoline Net Spec Position (lhs) Gasoline Price (rhs) $UD/gal NYMEX Gasoline Long Gasoline Short Gasoline Note: Positions reflect available data as of Friday. ICE futures data lag NYMEX data by one week. 4

5 Net NYMEX Heating Oil $UD/gal NYMEX Heating Oil () () () Net 500,000 () () Heating Oil Net Spec Position (lhs) NYMEX & ICE Natural Gas Heating Oil Price (rhs) Natural Gas Net Spec Position (lhs) $UD/MMbtu Natural Gas Price (rhs),,000, ,000 Long Heating Oil Short Heating Oil NYMEX & ICE Natural Gas Long Natural Gas Short Natural Gas Notes: Positions reflect available data as of Friday. ICE futures data lag NYMEX data by one week. Natural Gas ICE futures (,500 MMbtu) are adjusted :4 to reflect contract size of NYMEX (0,000 MMbtu) 5

6 CFTC Agricultural Charts Net () () () () () () () CBOT Wheat Wheat Net Spec Position (lhs) Wheat Price (rhs) $UD/bsh CBOT Wheat Long Wheat Short Wheat Net CBOT Corn $UD/bsh 850 CBOT Corn , () 350 () Corn Net Spec Position (lhs) Corn Price (rhs) 50 Long Corn Short Corn Net () () () CBOT Soybean $UD/bsh,700,600,500,400,300,00,00, CBOT Soybean Soybean Net Spec Position (lhs) Soybean Price (rhs) Long Soybean Short Soybean 6

7 TDS Commodities Forecast Table Commodity Spot (Avg of forward month contracts) Price QF QF Q3F Q4F QF QF Q3F Q4F 08F 09F Precious Metals Gold $/oz,37,300,300,35,35,35,35,375,375,33,350 Silver $/oz Platinum $/oz 959,000,050,075,00,50,50,00,00,056,75 Palladium $/oz,00,000,000,05,050,00,00,50,50,09,5 Base Metals #N/A Copper $/lb $/tonne 7,079 6,675 6,675 6,850 6,850 6,875 6,875 6,950 6,950 6,763 6,93 Zinc $/lb $/tonne 3,380 3,475 3,475 3,50 3,50 3,307 3,307 3,57 3,57 3,36 3,47 Lead $/lb $/tonne,547,646,646,469,469,60,60,53,53,557,557 Nickel $/lb $/tonne,488,03,03,44,44,03,03,44,44,33,33 Aluminium $/lb $/tonne,88,050,050,6,6,6,07,07,6,083,094 Ene rgy #N/A WTI Crude Oil $/bbl Brent Crude Oil $/bbl Heating Oil (ULSD) $/gal Gasoline $/gal NYMEX Natural Gas $/MMBtu AECO Natural Gas $/MMBtu CAD/GJ Uranium $/lb New castle Thermal 5 $/tonne Notes: F = Forecast, E = Estimate, A = Actual;. London PM Fix;. LME; 3. Molybdenum equivalent to moly oxide, FOB USA; 4. CFR China, 6% Fe, dry; 5. Japan CIF steam coal markernewcastle Source: Bloomberg, TD Securities Commodities Strategy Team: Bart Melek Global Head of Commodity Strategy bart.melek@tdsecurities.com Ryan McKay Commodity Strategist ryan.mckay@tdsecurities.com Daniel Ghali Commodity Strategist daniel.ghali@tdsecurities.com This report has been prepared solely for information purposes and is not intended to provide financial, legal, accounting or tax advice and should not be relied upon in that regard. Information provided in this Report is believed to be accurate and reliable, but we cannot guarantee it is accurate or complete or current at all times and no representation is made in this regard. Conclusions and opinions do not guarantee any future event or performance. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. It is based on public information. Changes to assumptions may have a material impact on any returns detailed. Historic information or performance is not indicative of future returns. The information is subject to change without notice. Any views expressed are those of the author and do not necessarily express those of The Toronto Dominion Bank ( TD Bank ). TD Bank or an associated company may have effected or may effect transactions for its own account in the securities described herein. Any transaction entered into is in reliance only upon your judgment as to both financial and suitability criteria. No proposed customer or counterparty relationship is intended or implied between TD Bank or any of its regulated subsidiaries and a recipient of this document where that recipient is not an existing customer or counterparty of TD Bank or one of its regulated subsidiaries. COPYRIGHT 03 by TD Securities Inc. TD Securities is a trademark of the TD Bank, representing TD Securities Inc., TD Securities (USA) LLC and certain investment activities of the TD Bank. The TorontoDominion Bank is regulated by the FSA. 7

8 Global Disclaimer This material is for general informational purposes only and is not investment advice nor does it constitute an offer, recommendation or solicitation to buy or sell a particular financial instrument. It does not have regard to the specific investment objectives, financial situation, risk profile or the particular needs of any specific person who may receive this material. No representation is made that the information contained herein is accurate in all material respects, complete or up to date, or that it has been independently verified by TD Securities. Recipients of this analysis or report are to contact the representative in their local jurisdiction with regards to any matters or questions arising from, or in connection with, the analysis or report. Historic information regarding performance is not indicative of future results and investors should understand that statements regarding future prospects may not be realized. 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Commodities: CFTC Weekly Report Rates, FX and Commodities Strategy 12 January 2018 TD Securities Toronto

Commodities: CFTC Weekly Report Rates, FX and Commodities Strategy 12 January 2018 TD Securities Toronto Rates, FX and Commodities Strategy CFTC Commitment of Traders Report for the Week Ending January 09, 08 Gold specs continued to increase their net length, as traders aggressively added to their longs while