"Sell Everything in Europe! The third-largest sell-off in a decade, funds capitulate across the board."

Multiple sources show that European assets are experiencing one of the most intense sell-off waves in nearly a decade, with institutional investors cutting their European exposure at an extreme pace.

According to Goldman Sachs Prime Brokerage data, the net selling scale of European assets last month hit the largest single-month decline since March 2025, ranking third highest in the past decade. The ratio of short positions to long positions reached as high as 2.2 to 1.

Meanwhile, JPMorgan data shows that the comprehensive Europe positioning indicator has fallen to the third lowest level since 2015, with the standard deviation dropping below negative 1.5. The 4-week position change has now fallen below negative 2 standard deviations.

This figure means that the current net short pressure on European positions is already at an extreme level in the historical distribution of the past ten years, only appearing after a handful of historic moments of market stress.

JPMorgan data further shows that, measured by the Z-score of 1-month position changes, the reduction of European holdings by CTAs has reached the most extreme level in the data series’ history.

As representatives of trend-following strategies, CTA's concentrated exits often have a self-reinforcing effect, creating extra downward pressure on the market at the technical level.

JPMorgan's positioning team noted that, when aggregating hedge funds, CTAs (Commodity Trading Advisors), and pure long funds, overall European positions are now at a "very low level."

Signs of capital withdrawal are not only evident in stock positions—foreign exchange markets simultaneously confirm a systemic risk-aversion trend.

The skew in the euro options market continues to decline, indicating that option market participants have generally shifted to betting on euro depreciation.

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