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Global bond funds gain first weekly inflow in two months

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© Reuters. FILE PHOTO: Woman holds U.S. dollar banknotes in front of Euro banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) – Global bond funds obtained inflows in the week to June 1 after eight weeks of outflows, lifted by strong demand as fears over aggressive monetary tightening and excessive price pressures eased.

Investors purchased a net $6.16 billion worth of global bond funds in their first weekly net buying since March 30, marking the biggest weekly inflow since Jan. 5, according to Refinitiv Lipper data.

Graphic: Fund flows: Global equities, bonds and money market – https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnddaepq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

Last week, minutes from U.S. central bank’s most recent monetary policy meeting hinted potential for a pause in policy rate hikes later in the year.

Investors hope that U.S. jobs data due on Friday might sway the Federal Reserve to slow its current aggressive pace of interest rate hikes over the coming months.

Investors acquired U.S. bond funds of $7.09 billion, while European and Asian funds received inflows of $1.15 billion and $0.08 billion, respectively.

Global high yield bond funds drew $7.62 billion, the largest amount since at least July 2020, while government bond funds lured $4.54 billion.

However, investors disposed global short and medium-term bond funds worth $3.89 billion, recording outflows for the 21st subsequent week.

Graphic: Global bond fund flows in the week ended June 1 – https://fingfx.thomsonreuters.com/gfx/mkt/klpykoowxpg/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20June%201.jpg

Meanwhile, global equity funds had purchases worth a net $9.38 billion, the biggest since Feb. 9, amid robust demand for ETFs, which garnered inflows of $14.42 billion.

Among sector funds, healthcare, metals and mining as well as tech funds gained inflows of $1.19 billion, $445 million and $86 million, respectively, but financials lost $1.03 billion in outflows.

Money market funds, meanwhile, saw net selling of $40.99 billion, the biggest since April 13.

Graphic: Fund flows: Global equity sector funds – https://fingfx.thomsonreuters.com/gfx/mkt/lgvdweeyypo/Fund%20flows-%20Global%20equity%20sector%20funds.jpg

Data for commodity funds showed investors exited gold and precious metal funds worth $521 billion after purchases of $1.33 billion in the previous week. Energy funds also had small outflows.

An analysis of 24,309 emerging market funds showed investors purchased equity funds worth $167 million after seven weeks of net selling, but sold bond funds of $194 million.

Graphic: Fund flows: EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/egpbkwwdrvq/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

Global bond funds gain first weekly inflow in two months

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