BoA/Merrill Lynch monthly survey of fund managers was conducted August 1 – 7, results released on Tuesday (US time)

From the report:

  • “Cash levels spiked from 4.5% to 5.1%, highest since June 2012, well above the ‘buy’ signal of 4.5%”
  • Investors scaled back risk in response to rising geopolitical concerns and rise in US yeilds
  • Net 44% of those polled were overweight equities in August (down from net 61% overweight in July, which was the second highest reading in more than 13 years, only behind the 67% overweight seen in February 2011)
  • Net 62% underweight bonds (was 64% in July, which was the biggest underweight for the year so far)
  • A net 5% of fund managers were underweight commodities in August, versus a net 15% underweight in July and net 17% underweight in June

And, more specifically for FX:

  • Record high net 84% of those polled looked for the dollar to rise
  • Record high net 61% thought the dollar is currently undervalued
  • Net 40% said the euro is “the currency they most expect to depreciate (on a trade-weighted basis), a reading that represents a two-year high in negativity towards the euro, up from a net 28 percent in July”