Citigroup strategist David Chew says Europe is the only major region showing a
clear improvement in risk appetite recently, supported by fresh inflows and
stronger-than-expected corporate earnings. Last week positioning rose across all
major European indices while US positioning indicators signalled weakening
investor confidence amid AI-related concerns. In Asia AI fears have driven
divergent positioning; South Korea’s benchmark has moved into extreme bearish
territory. Chew notes Euro STOXX 50 positioning was unusually stable through
July versus larger adjustments in US indices, and overall market positioning
remains positive rather than overheated. He adds Europe has also benefited from
the ECB’s decision to hold rates.
