LONDON, April 21 (Reuters) – Traders lower their money holdings for the primary time in eight weeks within the week to Wednesday, whereas shedding equities and gold, based on a report from BofA World Analysis on Friday.
Market focus has shifted to inflation and the outlook for financial tightening in latest weeks as fears round banking shares receded and a market measure of volatility (.VIX) fell to its lowest degree since November 2021.
Money funds noticed outflows of $65.3 billion, BofA stated, citing EPFR knowledge. Bond funds recorded inflows of $4.6 billion, whereas buyers offered $2.6 billion of world shares and pulled $70 million out of gold funds.
Final week knowledge confirmed U.S. shopper costs rising in March, whereas knowledge this week confirmed indicators of the labor market cooling.
“Core inflation in large economies stays stubbornly excessive,” the BofA analysts stated, including that inflation is being aided by structurally low unemployment charges.
Nearly all central banks are on maintain or near the tip of the speed hike cycle, thus “locking in” excessive inflation, they stated, “as is (the) trajectory of presidency spending, deficits and debt”.
Rising market debt funds noticed their first weekly influx in 10 weeks, of $600 million. Traders put $2.3 billion into rising markets equities, the most important influx in 4 weeks.
BofA stated its bull and bear indicator – a measure of market sentiment that runs from 1 to 10, with a better studying extra bullish – jumped from 2.3 to 2.8 on “stronger bond inflows, EM inventory inflows, (and) bettering credit score technicals”.
Reporting by Lucy Raitano; Modifying by Amanda Cooper and Jan Harvey
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