Europe: Burning in the Streets, Underowned in the Books

Despite civil unrest in France, European equities remain deeply underowned with positioning at the 36th percentile. Flows are beginning to bottom, and CTA models suggest increasing buying interest in European indices compared to the US.

Key Takeaways

• 1.European equity positioning remains extremely depressed, currently at the 36th percentile despite signs of flow bottoming.
• 2.Systematic investors (CTAs) are showing buying interest in European markets, specifically Euro Stoxx 50 futures.
• 3.Europe appears less overbought than US and global markets from a fund flow perspective, suggesting reversal potential.

Table of Contents

• Running riot
• Positioning
• Flow
• The domestic flow
• EU MoMo
• US Prime
• Less overbought
• Narrowing volatility gap
• CTAs
• Not how tops are formed

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