Investor positioning in Europe turns bearish
STOXX 600 down 0.6%, CAC 40 down 0.8%
Oil & gas stocks lead, insurers lag
Wall St futures lower
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INVESTOR POSITIONING IN EUROPE TURNS BEARISH
Three elections in eight days, two in France and one in Britain, is a lot for European markets to grapple with and investor positioning reflects that risk, according to analysts at Citigroup.
In their weekly note on equity market positioning, Citi says investors have turned "significantly bearish" ahead of the UK election on Thursday and France's second round vote on Sunday.
"Eurostoxx positioning momentum is more bearish with new short flows dominating weekly activity," Citi said in a note published late on Monday.
"FTSE positioning has also turned neutral, however this has been predominantly driven by investors unwinding long positions rather than adding to risk exposures."
European equities have struggled since Emmanuel Macron announced an election on June 9 and a relief rally on Monday after the first round is already being unwound.
The STOXX 600 .STOXX has erased all of Monday's gains, while the CAC 40 .FCHI in France is still over 5% below where it was before Macron's surprise announcement.
"This bearish sentiment is the continuation of a longer trend seen in the past two months of investors turning more from Europe towards US exposure but is also amplified by the election risk in France," Citi said.
"This trend can also be seen in the European Banks positioning where investors have added new shorts to futures and ETFs have had accelerating outflows."
Reprinted with permission of Citi Research. Not to be reproduced.
(Samuel Indyk)
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TUESDAY'S OTHER LIVE MARKETS POSTS
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THE PRICE IS RIGHT CLICK HERE
CAGEY START FOR EUROPE CLICK HERE
EUROPEAN EQUITY FUTURES RED CLICK HERE
DECISION DAY FOR FAR RIGHT'S RIVALS CLICK HERE
Vote share in first round results of France's parliamentary election https://reut.rs/3RQuaXh
Euro perks back up after first round of French election https://reut.rs/45OrcID
Europe https://tmsnrt.rs/4cg4Imd
Citi flows https://tmsnrt.rs/3VG9e6g
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