"Sell everything in Europe"! The third-largest sell-off in a decade, all funds capitulate

Multiple data sources indicate that European assets are experiencing one of the most intense sell-off waves in nearly a decade, with institutional investors reducing their European exposure at an extremely rapid pace.

According to Goldman Sachs Prime Brokerage data, last month's net selling of European assets saw the largest monthly decline since March 2025, ranking third highest over the past ten years, with a short-to-long ratio as high as 2.2 to 1.

Meanwhile, JPMorgan data shows that the composite European positioning indicator has fallen to its third lowest level since 2015, with the standard deviation below negative 1.5, and the 4-week position change dropping even further beneath negative 2 standard deviations.

This figure means that the current net short pressure on European positions is already at an extreme in the past decade's historical distribution, with similar readings only occurring after a few significant episodes of market stress.

JPMorgan data further shows that, based on the 1-month positioning change Z-score, the scale of position reduction in European assets by CTA groups has reached the most extreme level in the history of this data series.

As representatives of trend-following strategies, sudden CTA exits often have a self-reinforcing effect, creating additional downside technical pressure in the market.

The JPMorgan positioning team points out that when considering hedge funds, CTAs (Commodity Trading Advisors), and pure long-only funds together, overall European positions are at a "very low level."

The signs of capital outflow are not only evident in equity holdings, but the foreign exchange market also confirms a systematic risk-averse trend.

The skew in the euro options market continues to decline, indicating that options market participants have largely turned to betting on further euro downside.