22.3 C
New York
Tuesday, May 24, 2022

Investors pile into safe haven bonds, shun U.S., European stocks: BAML

Investors pile into safe haven bonds, shun U.S., European stocks: BAML© Reuters. A trader works on the floor of the NYSE in New York

By Josephine Mason

LONDON (Reuters) – Investors piled into bonds in the past week and pulled billions of dollars from U.S. and European stocks as they sought safety in assets seen as less risky in times of economic uncertainty, Bank of America Merrill Lynch (NYSE:) (BAML) said on Friday.

The bank’s report, based on EPFR data which tracks fund flows from Wednesday to Wednesday, showed investors yanked $15 billion from equities in the week to Jan. 30, the tenth outflow of the past 11 weeks.

Some $15.2 billion was pulled from U.S. stocks and $3.7 billion from Europe, marking the 46th weekly outflow of the past 47 weeks from the region.

In turn, bonds recorded inflows of $9.4 billion, their biggest since January last year. Investors pumped $4.7 billion into investment-grade bonds, the most since February last year, the data showed.

Japan and emerging market equities continued to see inflows, with $4.4 billion and $1.3 billion respectively.

Investors have pounced on emerging market equities and bonds in recent months amid expectations that the U.S. Federal Reserve will not raise interest rates as quickly as previously expected, pushing the U.S. dollar.

Cumulative flows in EM debt and equity hit $369 billion last week, just $2 billion shy of the record last January, the data shows.

(Graphic: Emerging Market Inflows – https://tmsnrt.rs/2ToAQvy)

Investors are no longer extremely bearish, with the Bull & Bear indicator at 3.3, its highest since October and up from 2.8 previously, but investor positioning suggests the risk asset rally can continue, BAML said.

For instance, the private client Treasury Bill allocation is at a record high, it said.

The data comes after big swings in stock markets in recent months – the just closed out its best January since 1987 after suffering its worst December in almost 90 years – as investors fret about the U.S.-China trade dispute, U.S. interest rate policy and slowing global economic growth.

(Graphic: TBill allocation – https://tmsnrt.rs/2t11Wgx)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles