Citi equity market positioning model notes positioning easing, but risks remain
- Citi says that a tech-led selloff triggered positioning deterioration across major equity markets, with long unwinds, new shorts and rising unrealised losses driving flows; Nasdaq reset lower, but remains vulnerable with all longs in loss.
- DAX moved into bearish territory, while KOSPI faces the greatest deleveraging risk despite elevated positioning.
- Upcoming earnings are seen as key to whether positioning stabilises or unwinds further.
Context
Citi's model indicates a significant shift in equity market positioning, with a tech-led selloff resulting in long unwinds and increased short positions. This suggests increased vulnerability in markets like the DAX and KOSPI, highlighting elevated risks ahead, particularly before upcoming earnings reports that may determine whether this trend intensifies or stabilizes.
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