US money market funds draw sharp inflows in the week to Oct. 2

US money market funds saw massive inflows in the week to Oct. 2 as investors sought safer assets on caution ahead of a key payrolls report amid heightened geopolitical concerns in the Middle East.

They acquired US money market funds of a net USD 41.32 billion during the week following about USD 113.11 billion worth of net purchases in the previous week, according to LSEG Lipper data.

A stronger-than-expected September non-farm payrolls report on Friday, however, eased worries about the health of US labor market and pared back market bets of a larger Fed rate-cut in November.

US equity funds also gained a significant USD 30.8 billion worth of inflows during the week, the largest amount since at least December 2020.

Large-cap equity funds garnered a hefty USD 35.49 billion, the highest inflow since at least January 2019. US investors, however, divested mid-cap, multi-cap, and small-cap funds of a net USD 1.94 billion, USD 1.72 billion and USD 1.31 billion, respectively.

Among sectoral funds, real-estate, utilities, and industrial sectors drew USD 461 million, USD 356 million and USD 321 million worth of inflows, respectively, while healthcare and financials suffered USD 919 million and USD 537 million worth of net selling.

Demand for US bond funds, meanwhile, eased to the lowest in four weeks as they obtained about USD 2.8 billion in net purchases.

US short-to-intermediate government and treasury funds had 5.03 billion worth of net sales following three weekly inflows in a row.

Investors, meanwhile, purchased short-to-intermediate investment-grade, municipal debt, and general domestic taxable fixed income funds of USD 3.6 billion, USD 1.88 billion, and USD 852 million, respectively.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by David Evans)