Investing.com — Global equity positioning remains broadly supportive, but Citi said regional divergences are becoming more pronounced, with short squeeze risks outweighing the prospect of broad-based investor de-risking.
In the U.S., Citi said risk flow and short covering are sustaining bullish positioning, though exposure is becoming increasingly concentrated.
positioning has accelerated to “stretched levels” despite recent index weakness, while ’s profit and loss profile “remains the weakest amongst US indices with a relatively larger proportion of longs in loss.”
The bank stated in its note to clients that positioning risks remain contained for now as “neither long nor short books have reached capitulation levels.”
In Europe, Citi highlighted improving risk sentiment and lower energy concerns, which have driven a combination of fresh longs and short covering across all major indices.
The stands out as “the region’s most likely source of further squeeze-driven upside,” with short positioning sitting near historical extremes and average shorts increasingly loss-making. Citi said a continued rally “could trigger further short-covering flows, particularly within DAX.”
flows were balanced between new longs and short covering, while the continued to attract conviction-led buying with limited evidence of forced repositioning.
Across Asia, Citi said positioning trends are less uniform. has seen a meaningful rebuild in bearish exposure, while the ’s recent rebound has been supported by the unwinding of profitable shorts.
Overall, Citi concluded that “positioning risks remain more skewed toward incremental short squeezes than broad-based investor de-risking.”
Source:
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