MILAN/LONDON (Reuters) – Global investor sentiment improved in September for the first time since June on optimism over a soft landing and interest rate cuts by the U.S. Federal Reserve, a BofA survey of fund mangers published on Tuesday showed.

According to the survey, cash allocations fell to 4.2% with investors also rotating to bond-sensitive assets from cyclicals, driving overweight allocations to utilities to the highest since 2008. Commodity exposure, meanwhile, fell to a seven-year low.

BofA said investors in the survey were best described as “nervous bulls”.

Signs of a slowdown in the U.S. labour market and a deterioration in other economic metrics have prompted traders to raise bets on an unusually large rate cut at the Fed’s policy meeting this week.

Stocks have hit record highs and bond prices have also rallied sharply as investors price in the prospect of relief from several years of sky-high interest rates.

“52% of fund manager survey investors believe there will be no recession for the U.S. economy in the next 18 months,” the bank said.

The survey, which covers the period from Sept 6-12 and canvassed 243 panellists with $666 billion in assets under management, showed six out of 10 polled believed interest rates were too restrictive, marking a 16-year high.

(Reporting by Danilo Masoni and Amanda Cooper; Editing by Christina Fincher)