UBS Equities-Global Strategy _CTAs Positioning and Flows - Biweekly Upda...-117023662

ab4 August 2025Global ResearchGlobal StrategyCTAs' Positioning and Flows - Biweekly UpdateDetails on the methodology/model can be found in our Q-Series report(Stretched) Risk-on positioning about to be tested• CTAs have more than tripled their equity exposure in July. They are max long when markets are starting to be toppish, which is invigorating equity bears looking for technical/systematic outflows. With no room to buy, we should expect CTAs to reduce exposure from here, but only gradually ($10/20bln in the next 2wks). Indeed, base effects are still supportive and realized volatilities are likely to remain depressed for the rest of the summer, limiting/slowing outflows in the near term.• CTAs have slowly but surely rebuilt duration shorts, especially in Europe. The level of conviction is medium to high, with limited appetite to add further exposure until price actions (tariff finally feeding inflation metrics?) suggest to do so.• There may be a little bit of complacency in credit spread as they just reached their 2007 lows. But in a low vol environment, carry is good to collect. CTAs are doing so in Credit.• In FX, the dollar rebound in July has hurt CTAs quite badly. They had no other choice than to reduce positioning, buying back $50/60bln over the month, roughly ⅓ of their initial shorts. Unless weak NFP numbers bring back a September cut, we expect CTAs to keep buying USD aggressively, to get close to neutral by mid/end of August.• In Commo, CTAs are very long metals & energy, very short agriculturals. We anticipate a little bit of profit-taking in both legs, and a massive rotation away from Copper. Current signals: bullish stocks/credit/precious, bearish bonds/USD/agriculturalsa) Equities: bullish most indicesb) Bonds: bullish Italy, Australia & US belly; neutral Korea & EU front-end; bearish Japan, EU, UK & US back-endc) Credit: bullish across the boardd) Currencies: bearish USD (but buying)e) Commodities: bullish metals (especially precious) & energy, bearish agriculturalsPotential trades in couple of chartsLevels to watch on S&P 500Levels to watch on UST 10yWhat our CTA model says about FX? What our CTA model says about Equities?What our CTA model says about Rates? What our CTA model says about Credit?What our CTA model says about Commodities?Figure 1: CTA price momentum signals in major markets: today vs forecast-1.00-0.75-0.50-0.250.000.250.500.751.00US10Y EU10YSPXSX5EMESA(EM Eq)XIN9IEURMXNCNHCdxHY CrudeGoldSignal (t)Exp. Signal (t+2w)Signal value [-1,+1]Source: UBS, BloombergFigure 2: Current positions and expected flows (as % of ADV) in major markets-20-15-10-5051015202530US10Y EU10YSPXSX5EMESA(EM Eq)XIN9IEURMXNCNHCdxHY CrudeGoldPosition (t, %ADV)Expected Flows (t, t+2w, %ADV)(%ADV)EU10y: -35%ADVXIN9I: +51%ADVCDX HY: +36%ADVSource: UBS, BloombergThis report has been prepared by UBS Europe SE. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page