The easing of inflation in the United States reignites expectations for the Federal Reserve to cut interest rates, with funds flowing back into global equity funds
The easing of inflation in the United States has reignited expectations for interest rate cuts by the Federal Reserve. Global equity funds saw an inflow of $34.38 billion in the week ending December 25, reversing the previous week's net outflow of $36.84 billion. U.S. equity funds attracted $20.56 billion, while European and Asian funds received $5.11 billion and $2.84 billion, respectively. Global bond funds experienced a net outflow of $1.47 billion for the second consecutive week, while short-term bond funds attracted $1.78 billion. Gold and precious metals funds attracted $1.25 billion, marking the largest single-week inflow in nine weeks
The Zhitong Finance APP noted that data from LSEG shows that in the week ending December 25, global equity funds witnessed significant inflows, reversing the large net sell-off from the previous week. The release of a moderate inflation report in the U.S. and news of the government avoiding a shutdown boosted investor confidence, prompting them to re-embrace risk assets.
According to LSEG data, investors injected a massive $34.38 billion into global equity funds, marking the largest scale in six weeks, following a net sell-off of $36.84 billion the previous week.
A report released by the U.S. Department of Commerce showed that the Personal Consumption Expenditures Price Index rose by 0.1% in November, lower than analysts' expectations, rekindling hopes in the market for further interest rate cuts by the Federal Reserve next year.
U.S. equity funds attracted $20.56 billion in inflows, marking the seventh net inflow in eight weeks. Meanwhile, European and Asian funds also received substantial inflows of $5.11 billion and $2.84 billion, respectively.
Global sector equity funds experienced net outflows for the third consecutive week, totaling $2.48 billion. Specifically, investors withdrew $810 million from healthcare funds, $639 million from consumer discretionary funds, and $480 million from metals and mining funds.
Global bond funds saw a net outflow of $1.47 billion for the second consecutive week, following 51 weeks of inflows up to December 11.
Global high-yield bond funds experienced the largest outflow in eight months, with a net sell-off of $2.99 billion this week. In contrast, investors injected $1.78 billion into short-term bond funds.
Investors net injected $16.95 billion into money market funds, reversing two weeks of net selling.
In terms of commodities, gold and precious metals funds attracted a net inflow of $1.25 billion, marking the largest single-week inflow in nine weeks, while energy funds saw a net sell-off of $212 million.
Meanwhile, data covering 29,565 emerging market funds showed that equity funds continued the trend with a net sell-off of $1.75 billion for the seventh consecutive week, while bond funds also experienced a total net outflow of $957 million.
