With: 

Sam Lynton-Brown, CFA, Head of Global Developed Markets Strategy

Ankit Gheedia, CFA, Head of Equity & Derivatives Strategy, Europe

BNP Paribas London Branch | Global Markets (Recorded 24 May 2022) 

 

Challenging the stock market adage, Sell in May, go away and come back on St Leger’s day, European equities have enjoyed a seasonal bounce from May into June in recent years, due, in our view, to investors closing their short positions on European equities before the less liquid summer months.

The SX5E front month open interest is approaching Covid highs and we believe this indicates congested short positioning in European equities. Near term, we expect shorts to unwind ahead of the summer holidays and see potential for short-term upside in SX5E.

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