By Sam Boughedda
Citi analysts told investors in a note Tuesday that sentiment across market positioning is becoming increasingly weaker.
"In the US, despite net notional positioning increasing, weekly activity better reflected one of tactical repositioning and greater aversion," wrote analysts.
The analysts explained that futures positioning in the U.S. rose last week, at odds against the backdrop of increasing market uncertainty.
"Net notional was up for both the S&P and Nasdaq. This led to a reversal of previous bearish positioning across both markets. However, rather than a rise in new risk flows, the increase in S&P positioning arose from short unwinds," they added.
Meanwhile, the Citi analysts revealed that ETF positioning flows continue to be bearish, with short and long positioning levels falling below long-term averages, which they said is indicative of a decreasing risk appetite.
Elsewhere, the analysts said European Banks futures positionings, which were strongly bullish until early February, is down sharply in recent weeks, with positioning now switching net short.
"Positioning risk is elevated, with short profits extended," analysts state.