Citi's latest Quantitative Global Macro Strategy report indicates a shift in asset allocation, moving U.S. equities to underweight while maintaining a bullish stance on global risk assets. The report highlights a preference for European and emerging market equities, citing "further loosening of financial conditions and economic growth that remains resilient." Citi analysts note that "economic data continues to surprise to the upside," with financial conditions now 1.2 standard deviations below the 10-year average, signaling a supportive environment for risk assets. The report also emphasizes a strategic overweight in high-yield credit over investment-grade, and a small overweight in energy within commodities. As the Federal Reserve and European Central Bank continue to ease monetary policy, Citi's model favors carry strategies and quality equities, while moving away from U.S. equities in favor of more cyclical European markets.