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Citi warns of rising short-squeeze risk in European stocks, especially Germany's DAX, amid strong US market flows.

Market News
07 Jul 2026
Proactive Investors
View Source
Bullish
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Citi has highlighted an increasing risk of short squeezes in European stock markets, particularly in Germany's DAX index, as investors betting against rising prices are forced to buy shares, pushing prices higher. In the US, bullish positioning remains strong but concentrated in smaller companies like those in the Russell 2000 index. European sentiment is improving with investors opening long positions and reducing bearish bets, while Asia shows mixed trends. Citi's analysis suggests more short squeezes are likely rather than broad selling, indicating potential for further gains in certain markets.

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