The firm says that hedge funds have dropped short trades on US regional banks as of the end of August and instead have now turned bullish on the broader US financial sector in general. The note is from Goldman’s prime brokerage desk, which serves hedge funds, and says that US financial services companies – including banks – were among the most sought-after stocks last week.

Meanwhile, they find that the ratio of long trades compared with short positions on US regional banks has risen by 26% since the low of the year at around mid-July.

This article was written by Justin Low at www.forexlive.com.