Key facts
- Global money market funds attracted $153.81 billion in the week ended October 7.
Global money market funds attracted $153.81 billion in the week ended October 7, marking the largest weekly inflow since early May. Investors sought safer assets amid a global bond selloff, concerns over European government debt, and persistent inflation fears.
The strong inflows into money market funds indicate a heightened risk aversion among investors, who are moving capital away from riskier assets like equities and bonds due to concerns about inflation and government debt. This trend suggests a cautious market sentiment and a potential slowdown in economic activity.
Global money market funds experienced significant inflows totaling $153.81 billion in the week ending October 7, as investors sought refuge in safer assets amid a broad selloff in bonds. This represents the largest weekly net purchase since May 6, according to LSEG Lipper data.
The increased demand for money market funds was driven by concerns over European government debt levels, persistent inflation fears, and a global bond market downturn. The 10-year US Treasury yield reached a 24-1/2-year high of 5.3645% on Wednesday, partly due to rising oil prices that fueled worries about inflation.
In contrast, global equity funds saw a modest inflow of $560 million, the lowest in three weeks. European equity funds attracted $6.19 billion, while Asian equity funds received $6.16 billion. However, US equity funds experienced outflows totaling $5.11 billion. Within equity sectors, technology, utilities, and industrials saw notable inflows, while financial sector funds faced outflows of $3.47 billion.
Global bond funds collectively drew $26.03 billion, their largest inflow since July 8. Short-term bond funds were particularly strong, gaining $9.36 billion. Gold and other precious metals funds continued their buying trend for a fourth consecutive week, with inflows of $1.41 billion. Emerging market bond funds also saw inflows of $1.48 billion, reversing the previous week's outflows, though emerging market equity funds continued to see outflows.
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