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Investors said U.S. government bonds were the "most crowded"
trade for the third straight month, while they saw the trade war
as the top risk to markets.
High demand for bonds has sent yields to multi-year lows across
the developed world with yields on German government bonds -
Europe's traditional safety play - setting fresh record lows.
One-third of investors surveyed by BAML expect a global
recession in the next 12 months, the highest such reading since
2011.
Last week, Goldman Sachs said that it no longer expected
Washington and Beijing to come to a trade agreement before the
2020 presidential election and that the chances of a protracted
trade war leading to recession were rising.
The tussle between the world's top economies has prompted
central banks to take a dovish stance with the U.S. Federal
Reserve expected to come up with back-to-back rate cuts.
The "onus is on Fed/ECB/PBoC to restore animal spirits," Michael
Hartnett, the bank's chief investment strategist, said.
In equities, the United States is seen as the most preferred
region over the next 12 months, while they continue to shun
Europe.
Half of the investors surveyed said corporate companies are
overleveraged.
Some 224 panelists with $553 billion in assets under management
participated in the survey between Aug. 2 and Aug. 8.
(GRAPHIC - Most crowded trade: https://tmsnrt.rs/2MYvO8E)
(GRAPHIC - Biggest tail risks: https://tmsnrt.rs/2YLSe3U)
(Reporting by Thyagaraju Adinarayan; editing by Josephine Mason
and Hugh Lawson)
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