LIVE MARKETS-CTAs shed $100 billion of stocks

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CTAs SHED $100 BILLION OF STOCKS

CTAs - trend-following hedge funds - are continuing to reduce their equity exposure, according to UBS strategists, who don't expect them to start buying yet, even as U.S. markets look to have steadied.

U.S. stocks .SPX have shed 1.2% this quarter but at one stage were 10% below their peak. Meanwhile European shares .STOXX have jumped almost 9% but the rally has shown signs of stalling in recent weeks.

"Going forward, we don't expect CTAs to turn aggressive buyers, unless stocks' price actions become supportive," UBS writes, highlighting that CTAs have so far sold $100 billion of equities in just four weeks.

"They will be equally responsive to positive or negative price actions," UBS adds.

In FX, UBS says CTAs are back to neutral on the U.S. dollar, closing the post election bullish trade.

"Not much flows to expect from them in the near term, trends are being reassessed," UBS says.

(Samuel Indyk)

TUESDAY'S OTHER LIVE MARKETS POSTS:

POSITIVE START ON TARIFF OPTIMISM CLICK HERE

EUROPE BEFORE THE BELL: STEADY AS SHE GOES CLICK HERE

RELIEF RALLY STARTS TO FIZZLE CLICK HERE