BofA: USD Longs Now Considered Most Crowded Trade

In the wake of Bank of America’s latest client survey they note that “the change in perception of the most crowded trade is the best summary of how investor sentiment has shifted over the summer. And to what extent price action has affected these perceptions. At the start of August respondents were most concerned about longs in risk. In September the most crowded position was considered to be the long in rates. And now, investors are most worried about the longs in USD.

• “This could be a concern, given that equities and rates corrected after making it to the most crowded pole position.”
• “The USD long is objectively crowded when looking at the extent to which investors extended their longs in September, but early signs of selling are showing up.”
• “We believe USD is near the peak, further strength requires a change in narrative.”