Global money market funds see third weekly inflow ahead of US inflation data

Jan 12 – Global investors accumulated money market funds for a third straight week in the seven days to Jan. 10, while pulling back from equity funds, as they favored safer bets ahead of key US inflation data.

Global money market funds secured a net USD 57.04 billion worth of inflows during the week, according to LSEG data.

The US consumer price index (CPI) data for December, released on Thursday, exceeded economists’ expectations, casting doubt on early interest rate cuts by the Federal Reserve. The CPI rose 0.3% in December, after a 0.1% increase in November.

By region, European and Asian money market funds were particularly in demand, as they drew inflows worth USD 26.25 billion and USD 24.23 billion, respectively. Meanwhile, US funds received just USD 4.6 billion.

In the equities segment, global investors sold about USD 7.72 billion worth of funds, posting a second consecutive week of outflows.

By equity sectors, consumer discretionary funds faced outflows of USD 614 million, the biggest weekly net selling since Sept. 27, 2022. Healthcare, and metals & mining sectors drew USD 582 million and USD 556 million worth of inflows, respectively.

Simultaneously, global bond funds garnered USD 10.77 billion in net buying, a third weekly inflows in a row.

Global corporate bond funds received USD 5.73 billion in a third straight week of net buying. Investors also poured USD 1.25 billion and USD 1.02 billion, respectively into government and high-yield funds.

Among commodities, precious metal funds suffered about USD 813 million in net selling, the biggest weekly outflow since Oct. 25, 2023. Energy funds also witnessed around USD 321 million worth of net disposals.

Data covering 27,981 funds in the emerging markets showed that investors poured about USD 174 million in bond funds, staying net buyers for a third successive week. They also purchased about USD 37 million worth of EM equity funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun H K)