Source: The Patriot Light | AWK Network | VIEW ORIGINAL POST ==>
Investing.com — UBS analysts said in a note Wednesday that Commodity Trading Advisors (CTAs) have adopted a “risk-on” stance, with a notable preference for U.S. equities over European and Latin American stocks.
According to the firm’s biweekly update on CTAs’ positioning and flows, equity beta exposure has remained stable despite subdued momentum across global markets in November.
“CTAs’ overall equity beta is close to its long-term average,” UBS noted, highlighting that the bulk of their equity risk is expressed in relative terms: long U.S. versus short EU and LatAm.
This positioning is said to reflect a broader divergence in market sentiment between regions.
In bond markets, UBS said CTAs have made significant sales in U.S. and Japanese durations, offloading $25 to $30 million in DV01 exposure since the last update.
However, UBS expects European bonds to attract inflows, with Korean and Italian bonds highlighted as “high conviction trades” for CTAs.
Currency-wise, CTAs continue to favor a stronger U.S. dollar. UBS pointed out that recent rounds of dollar buying, totaling $50 to $60 billion, have left little room for additional upside.
The firm also anticipates profit-taking…
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