HSBC Strategists Warn Risk Assets Showing Early Warning Signs as Sentiment Indicators Turn Cautious

According to HSBC strategists led by Max Kettner, sentiment and positioning indicators are displaying early warning signs for risk assets on July 20, 2026. The team's report noted that long-only investor positioning has risen, signaling elevated risk appetite. While Middle East tensions have driven oil prices higher, they have not yet triggered significant moves in interest rates or foreign exchange trading volumes. The strategists cautioned that if Middle East escalation persists alongside negative signals from their sentiment and positioning framework, risk assets may face temporary pullbacks, though they maintain a constructive view on equities and credit assets.
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