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Investors increased short exposure across a range of global equity markets last week as positioning became more defensive, according to Citi, with the bank highlighting the potential for crowded bearish trades to amplify any subsequent rebound.

Strategists led by David Chew said EuroStoxx and U.S. large-cap positioning remained relatively resilient, but broader sentiment deteriorated as investors reduced directional risk.

The increase in short exposure has created “growing asymmetry in positioning outcomes,” according to Citi, particularly in markets including the Nikkei, KOSPI and S&P 500.

The bank’s analysis does not forecast a market rebound. Instead, it identifies circumstances in which the closing of existing short positions could increase buying if markets move higher.

U.S. Small Caps Record Largest Positioning Decline

Citi said the broader deterioration followed changes in monetary policy from the Federal Reserve and Bank of Japan, as well as higher energy prices and geopolitical tensions.

The bank described the period as “one of the most synchronized periods of de-risking observed during the current rate cycle.”

Bearish flows were recorded across the three major U.S. equity indices, with Citi saying investors primarily established new short positions rather than reducing existing long exposure.

The Russell 2000 experienced the largest weekly decline in positioning across the markets covered by Citi globally. According to the bank, all remaining long positions in the index are currently loss-making.

Positioning in the S&P 500 and Nasdaq was more resilient, with the closing of some short positions offsetting part of the increase in bearish exposure.

Citi Highlights S&P 500 Short Positioning

Around 80% of both long and short S&P 500 positions are currently loss-making, according to Citi.

The bank noted that the overall short book is larger, leading its strategists to conclude that “positioning asymmetry is skewed toward the risk of short covering.”

Citi said a modest rise in the index could therefore generate additional buying if short sellers close their positions.

The scenario depends on subsequent market movements and changes in investor positioning and does not indicate that a rebound will necessarily occur.

DAX Moves Into Mildly Bearish Territory

European markets also recorded increased short exposure.

Citi said new short positions in the DAX and European Banks index moved both into mildly bearish territory. EuroStoxx remained more constructively positioned despite experiencing the largest outflows in the region.

According to the strategists, the principal issue in Europe “is shifting from direction to positioning stress.”

Long positions across most European indices are currently loss-making, while Citi said the DAX has the weakest profit-and-loss profile in the region.

Short Exposure Remains Elevated in Asian Markets

Citi identified Asia as the most bearishly positioned region overall.

Although positioning in the Nikkei improved somewhat, it remained the most negatively positioned major equity market. Additional short exposure was also added to the KOSPI, Hang Seng and China A50.

Short books in the Nikkei, KOSPI and Hang Seng are close to historically elevated levels, according to Citi. The bank also estimated that more than 40% of short positions in both the Nikkei and KOSPI are currently loss-making.

Citi said this positioning means “any positive catalyst could trigger a disproportionately large, short-covering rally, particularly in Nikkei.”

The potential outcome depends on the emergence of a positive catalyst and subsequent investor behaviour. Citi’s analysis describes current positioning conditions rather than predicting future index performance.

Vault Ventures PLC (AQSE:VULT) announced a change of name to Sentry 7 PLC and the proposed appointment of a new CEO, Mark Evans-Smith, alongside a product update on its post-quantum cryptography platform for financial institutions.

Mark Evans-Smith, Proposed CEO: “Banks are replacing the cryptography that protects their records. Very few can yet prove, years later, what their own people said and that it has not changed. That is the problem we are solving, and I have joined to take it to market.” Read more¹ Read more²

Sulnox Group PLC (AQSE:SNOX) announced a four-year supply agreement with Spring Marine covering at least 34 vessels, alongside a strategic investment of up to £1.1m from Spring Marine.

Ben Richardson, CEO: “Spring Marine is another marquee customer embracing shipping’s inevitable decarbonisation agenda. Deciding to become a Sulnox shareholder as well as a long-term customer represents a powerful further endorsement of our product and strategy.” Read more

IntelliAM AI plc (AQSE:INT) announced a further purchase order from one of the world’s largest agricultural processing and commodities businesses, taking combined orders from this customer to over £450,000 in the last 12 months. The order involves a trial of IntelliAM’s machine learning and AI capability across the customer’s EMEA operations. Read more

Connecting Excellence Group PLC (AQSE:XCE) raised £600,000 through a subscription with participation from new institutional investors alongside strategic investor Adam Back.

Scott Ellam, CEO: “This raise has attracted institutional participation alongside continued support from Adam Back. That is a strong signal that our strategy — acquiring profitable, owner-managed recruitment businesses and holding them, coupled with a Bitcoin treasury — is beginning to be embraced by the market.” Read more

DXS International plc (AQSE:DXSP) returned to profitability for the year ended April 2026, with all customers renewing contracts for a further 18 months and new NHS opportunities expected to generate revenue from late 2026. Read more

Ormonde Mining PLC (AQSE:ORM) reported interim results to 30 June 2026, with cash increasing to €2.1m and positive developments across all three portfolio assets, including a new gold mineralised trend at Golden Rose and encouraging metallurgical results at its Scottish nickel project. Read more

Reveille Resources PLC (AQSE:REV) noted the Italian Senate’s final approval of framework legislation supporting the reintroduction of nuclear energy, providing a positive strategic backdrop to its uranium exploration activities in Lombardy. Read more

All Aquis Stock Exchange Announcements

Goldman Sachs has revised down its expectations for global smartphone shipments through 2028 while increasing its forecasts for the overall value of the market, reflecting expectations for higher average selling prices and a greater contribution from premium devices.

The bank now expects 1.1 billion smartphones to be shipped globally in 2026, followed by 1.2 billion units in both 2027 and 2028.

Compared with its previous estimates, Goldman reduced projected shipments by 1 million units in 2026, 8 million in 2027 and 0.2 million in 2028.

The forecasts correspond to a 10% year-on-year decline in shipments in 2026 and increases of 2% in each of the following two years. Goldman had previously forecast changes of negative 10% in 2026, positive 3% in 2027 and positive 1% in 2028.

Higher Prices Support Market Value Estimates

Despite its lower volume expectations, Goldman Sachs raised its projections for the value of smartphone sales.

The investment bank forecasts an 8% increase in global smartphone market value to $624 billion in 2026. It expects a further 5% increase to $655 billion in 2027 and growth of 3% to $674 billion in 2028.

The revised estimates incorporate Goldman’s expectations for higher average selling prices, including the effect of increased memory costs and greater demand for devices priced above $600.

As a result, the bank expects market value to increase even as smartphone shipment volumes decline in 2026 and subsequently record relatively limited growth.

Foldable Phone Penetration Still Expected to Increase

Goldman also revised down its projections for foldable smartphones while maintaining its expectation that the devices will account for a larger proportion of the overall market over time.

Foldable penetration is forecast at 3.1% in 2026, 5.7% in 2027 and 6.5% in 2028, compared with previous estimates of 3.6%, 5.9% and 6.8%.

That equates to projected foldable shipments of 35 million, 66 million and 77 million units across the three years. The forecasts are 14%, 4% and 5% below the bank’s previous estimates.

Goldman expects additional product launches from major smartphone manufacturers to contribute to the category’s expansion and included a potential foldable iPhone DUO in its assumptions.

The bank also expects the broader smartphone market to continue shifting towards premium devices, with new form factors and features contributing to its assumptions about higher average selling prices.

All figures represent Goldman Sachs estimates rather than achieved industry results and remain dependent on future demand, pricing and product developments.

Major artificial intelligence developers are likely to continue advancing their models despite growing discussion around security risks, according to analysis from BMO published Friday.

BMO, citing its AI expert, said concerns raised by industry executives about the security of increasingly capable artificial intelligence systems should be taken seriously, particularly regarding the alignment of those systems with human interests.

However, the firm said the continued release of more capable models raises questions about whether developers including Anthropic and OpenAI are prepared to meaningfully slow development.

Open-Access Models Could Face Greater Regulatory Scrutiny

BMO said recent hacking incidents involving artificial intelligence had generally caused limited harm but identified the potential misuse of freely accessible models as an area of concern.

Users have demonstrated that safeguards incorporated into AI systems can sometimes be bypassed, allowing models to produce outputs outside their intended restrictions, according to the firm.

The debate over AI safety has received additional attention after Anthropic chief executive Dario Amodei called for a coordinated slowdown in the development of advanced models, citing potential risks associated with increasingly capable artificial intelligence.

The supplied material said several other AI industry leaders have supported the proposal. AI security was also discussed at a US-China summit during the week.

BMO Forecasts Tighter US and Chinese AI Rules

BMO expects both the United States and China eventually to strengthen regulation governing artificial intelligence, particularly for open-source and open-access models.

The firm’s AI expert said such rules could require prior approval before some open-access models are made broadly available to the public.

BMO’s analysis suggested that both governments could have reasons to restrict the availability of certain AI models. If that occurs, the firm expects leading closed-source developers such as Anthropic and OpenAI could gain additional pricing power.

The potential regulatory changes and their effects on the competitive AI market remain forecasts rather than confirmed developments.

Token Costs Could Reach a Low Around 2030

BMO expects AI token prices to continue declining in the coming years, potentially supporting broader adoption of artificial intelligence tools.

The firm projects that token prices could reach a low around 2030 before changing direction. BMO expects closed-source providers could subsequently raise prices if customers become increasingly reliant on their services.

Actual pricing will depend on factors including technological development, competition, regulation and demand.

BMO also said Meta Platforms has improved its position in artificial intelligence through better utilisation of its AI infrastructure. The firm nevertheless assessed the company as remaining behind Anthropic and OpenAI in terms of AI capabilities.

BMO Sees Continued Demand for AI Computing Hardware

BMO maintained a positive assessment of computing hardware linked to artificial intelligence, pointing to increasing constraints on available computing capacity as adoption expands.

According to the firm, demand for computing resources is being supported in part by users finding that AI systems can perform more tasks than some initially anticipated.

BMO also forecasts changes in employment associated with artificial intelligence, with effects on white-collar roles expected to become more significant by 2028.

Effects on blue-collar employment could become more pronounced during the 2030s, according to the firm’s projections.

BMO linked the difference in timing to Moravec’s paradox, which describes how some physical tasks involving perception and dexterity can be more difficult to automate than certain cognitive activities.

The timing and scale of any employment effects remain uncertain and will depend on how artificial intelligence, robotics and related technologies develop and are adopted.

Gold prices rose on Friday but were still positioned for a weekly decline as markets monitored movements in the US dollar and Treasury yields alongside expectations for Federal Reserve monetary policy.

At 04:59 ET, spot gold increased 0.5% to $4,293.56 an ounce. Gold futures were 0.7% higher at $4,329.97 an ounce.

The US dollar index declined 0.2% to 101.11 during the session but had gained 0.9% over the previous week.

Movements in the dollar can affect demand for gold because the precious metal is denominated in the US currency, making it more or less expensive for buyers using other currencies.

Energy Prices Add to Inflation Considerations

Oil prices moved lower on Friday after rising during the previous session.

The move came as markets considered reports that US and Iranian negotiators were discussing a possible phased arrangement involving the Strait of Hormuz.

According to the reports, Iran would reopen the waterway in exchange for the United States lifting a naval blockade. No final agreement was reported.

Developments affecting energy supplies have kept oil prices elevated, prompting investors to monitor whether higher fuel costs could contribute to inflation pressures.

The Federal Reserve increased interest rates the previous week, marking its first rate rise in three years. Expectations for any subsequent policy changes are being assessed alongside energy prices and other inflation indicators.

US Treasury Yields Move Higher

US government bond yields rose on Thursday, with the 30-year Treasury yield approaching its highest level in more than 20 years.

Higher bond yields can affect the relative demand for gold because investors receive interest income from government debt, while gold itself does not pay interest.

Changes in expectations for Federal Reserve policy and Treasury yields therefore remain among the factors influencing the precious metals market.

ANZ Notes Continued Gold Investment Demand

ANZ analysts said gold investment demand has remained “resilient” despite what they described as increasingly challenging macroeconomic conditions.

The analysts also said there had been “no material liquidation so far.”

In the near term, gold markets continue to monitor oil prices, Treasury yields, the US dollar and expectations surrounding the Federal Reserve’s interest-rate policy.

Crude oil prices moved lower on Friday after reports of discussions between the United States and Iran over a possible phased framework involving the Strait of Hormuz, while markets continued to monitor developments affecting Saudi energy infrastructure.

At 04:02 ET, November Brent futures were 0.4% lower at $106.15 a barrel. US West Texas Intermediate futures declined 1.1% to $93.62 a barrel.

The two benchmarks had gained as much as 5% on Thursday before giving back part of the advance following reports of negotiations between Washington and Tehran.

The earlier increase came after Saudi Arabia said it intercepted six ballistic missiles launched by Yemen’s Iran-backed Houthis towards locations including Taif and the Yanbu area on the Red Sea.

Saudi Export Routes Remain Under Scrutiny

Oil markets continued to monitor Saudi Arabia’s export infrastructure after earlier damage to the country’s East-West pipeline disrupted crude flows to Yanbu.

Yanbu is a major Red Sea export hub connected with oil-producing areas in eastern Saudi Arabia.

The country has been directing additional crude towards Yanbu, although tanker-loading operations at the port had not fully resumed, according to the supplied information.

BMO Capital Markets analysts said Saudi crude supply concerns are “re-emerging, as the restart of the East-West pipeline has yet to translate into a resumption of Red Sea exports, while Houthi attacks continue to intensify.”

The combination of pipeline disruption and missile attacks has kept regional oil infrastructure among the factors being monitored by crude markets.

US and Iran Reportedly Discuss Phased Hormuz Framework

Oil prices reduced their earlier gains following media reports of talks between US and Iranian negotiators in New York.

The reported framework would involve Iran reopening the Strait of Hormuz, while the United States would lift its economic blockade of Iran.

The reports did not indicate that the two sides had reached a final agreement.

Reuters reported that only 17 commodity vessels passed through the Strait of Hormuz during one recent weekend, compared with an average of approximately 125 vessels per day before the war.

Crude shipments have continued through the strait but at reduced levels, according to the report.

US Crude Stocks Increase Against Expectations for a Decline

US inventory figures released during the week showed commercial crude stocks increasing by 3 million barrels in the week ended September 18.

Analysts had expected inventories to decline by 641,000 barrels.

Gasoline stocks decreased by 1.7 million barrels, while inventories of distillates fell by 400,000 barrels.

The increase in crude inventories provided an additional supply indicator as traders continued to monitor developments affecting international oil flows.

Diesel Supply Measures Reportedly Under Consideration

US diesel prices also remained in focus after reaching record levels.

Reuters reported that the Trump administration was considering options to increase the availability of diesel in the domestic market.

Energy Secretary Chris Wright has contacted executives at major refiners to determine their views on a voluntary restriction on diesel exports, according to the report.

The discussions followed separate reports suggesting that a 90-day export ban could be considered. The White House denied that such a ban was planned.

No final decision on voluntary export restrictions had been reported.