UBS Equities-Global Strategy _CTAs Positioning and Flows - Biweekly Upda...-117585854

ab2 September 2025Global ResearchGlobal StrategyCTAs' Positioning and Flows - Biweekly UpdateDetails on the methodology/model can be found in our Q-Series reportCTAs inclined to reduce risk-on bets• CTAs are starting to show some willingness to reduce equity exposure, although we don't foresee significant outflows yet. In a very adverse scenario (-2 stdev, S&P down to 6200), we expect CTAs to sell $-80/-90bln worth of global indices, a step up vs. the $-50/-60bln we simulated two weeks ago. EU core indices - SX5E, CAC, DAX - is where they are likely to cut first. On the other side, IBOV is where they have room to buy.• Not much change in CTAs' bond positioning. They remain biased towards paying rates, especially the back-end of the curve. They are long the belly in the US to floor their duration beta, which seems wise given the current level of macro/political uncertainty.• Like in equities, CTAs seem inclined to reduce exposure in credit spreads. Itraxx indices are the most at risk today, especially Itraxx Main.• In FX,CTAs' trading activity has been subdued in August, and is likely to remain so in the first two weeks of September. Favourite longs are EMEA & Latam FX, favourite shorts are USD & Asia FX. It is worth noting that CTAs will turn net long CNH (vs. USD) for the first time in months.• End of the summer was very supportive commodities. CTAs bought all 4 cohorts since our last update. We expect more Agricultural buybacks in the coming weeks. Current signals: bullish stocks/credit/precious, bearish bonds/USDa) Equities: bullish most indicesb) Bonds: bullish US belly, Australia & Italy; bearish EU, UK , Japan & US back-endc) Credit: bullish across the boardd) Currencies: bearish USD & Asia FXe) Commodities: bullish precious, neutral industrials & 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)XIN9IEURMXNCNHCdxHYCrudeGoldSignal (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)XIN9IEURMXNCNHCdxHYCrudeGoldPosition (t, %ADV)Expected Flows (t, t+2w, %ADV)(%ADV)EU10y: -40%ADVXIN9I: +45%ADVCDX HY: +40%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 30. Global Macro StrategyGlobalNicolas Le RouxStrategistnicolas.le-roux@ubs.com+33-14-888 5000Bhanu BawejaStrategistbhanu.baweja@ubs.com+44-20-7568 6833Paul WinterAnalystpaul-j.winter@ubs.com+61-2-9324 2080