The latest Commitment of Traders report, published by ICE on Wednesday and covering the week ended September 4, showed that investment funds increased their net-long position—the difference between long and short positions—by 2.6% week on week.

According to market data, the net-long position increased by a modest 1.5 million allowances, bringing the overall position to around 34 million allowances, its second-lowest level since April.

The increase in the net-long position was driven almost entirely by movements on one side of the market, as speculative traders added 1.5 million allowances to their long positions, bringing the total to 58 million allowances, while their short positions remained almost flat.

Fund positioning is generally viewed as a snapshot of market sentiment and traders’ expectations for prices. A net-long position, where long positions exceed short positions, typically signals a bullish bias, suggesting that speculative investors expect prices to rise.

Conversely, a net-short position tends to reflect a bearish outlook, with traders positioning for lower prices. Changes in these positions can therefore provide an indication of how investor sentiment is evolving over time.

After diverging a week earlier, investor positioning and EUA prices moved back in tandem, with EUAs gaining 1.75% over the week while funds increased their net-long exposure by 2.6%.