Equity rally extends as CTAs rebuild positions

Global equities extended a fifth straight week of gains, led by US stocks, as trend-following systematic funds (CTAs) rebuilt risk exposure, Bank of America said. BofA’s models estimate CTAs added roughly $40 billion of equity exposure during the week, with faster and medium-term models driving US longs while slower cohorts retain room to add. The bank expects continued CTA buying — about $20 billion focused on Europe next week — and notes CTAs are adding UST shorts and positioning around Bunds, Korea Treasury bonds and Chinese government bonds. FX positioning has been resilient after yen intervention, with models showing retained yen shorts and likely CTA buying of the euro, pound, Aussie and Canadian dollars. WTI crude was up ~8% on the week, where CTAs hold long oil exposure. Overall, flows support further equity upside but positioning remains uneven and yield sensitivity could cap momentum.