By Sam Boughedda
Citi analysts said in a note Tuesday that net positioning in U.S. equities is now the most bullish since late 2021.
In their note on equity markets positioning, the analysts explained that the bullish week means there is a potential for short squeezes.
"With nearly $20bn new long positions in S&P over the week, the net positioning moved clearly bullish," wrote analysts. "There is still $15bn shorts to clear, which are on average 4% in loss, and this could support markets near-term." The analysts also note that positioning is similar in NASDAQ, with all short positions in a loss.
Furthermore, they revealed that "$14 billion shorts on Eurostoxx are also all in loss (average 3.2%)," with near-term dynamics potentially supported by unwinds.
"Shorts on FTSE 100 are on average flat, so there is limited pressure for unwinds. Positioning in European Banks remains similar to last week - the market is slightly net short, but gross exposure has fallen," the analysts added.
Focusing on Asian equities, they stated that the extended long position was established in early March, but futures have had no flow momentum for the remainder of the month.