Global debt funds attracted inflows for a 29th straight week in the seven days to July 10 on expectations of a Federal Reserve rate cut amid weakening labor market conditions and easing inflation levels.
According to LSEG data, global bond funds drew a net $9.75 billion worth of inflows during the week after about $12.28 billion worth of net purchases in the prior week.
A closely watched U.S. labor market report last week indicated that the unemployment rate rose to a 2 1/2-year high of 4.1% in June, heightening market expectations of a Federal Reserve interest rate cut.
This expectation was further supported by an inflation report this week, which showed U.S. consumer prices fell by 0.1% in June, reinforcing a disinflationary trend. Consequently, the benchmark 10-year Treasury yields dropped to a four-month low of 4.168% on Thursday.
By region, U.S. bond funds led the way, securing about $3.77 billion in a sixth consecutive week of net buying. European and Asian funds, meanwhile, attracted about $3.22 billion and $1.53 billion, respectively.
Investors bought $1.97 billion worth of government bond funds, logging net inflows for an 11th week. Corporate, and loan participation funds received $1.09 billion and $448 million, respectively in net purchases.
Global equity funds experienced a third successive week of inflows, although at just $114 million, compared with $16.45 billion worth of net purchases in the prior week.
Investors ditched a notable $1.18 billion and $354 million worth of healthcare and financial sector funds, while the tech sector still drew approximately $1.22 billion, a fifth weekly inflow in a row.
Simultaneously, investors parked a net $34.16 billion in global money market funds, posting a second weekly inflow in a row.
In the commodities segment, precious metals funds saw the first weekly outflow in three, valuing $155.9 million on a net basis. Conversely, investors poured $106.8 million in energy funds, snapping a four-week selling streak.
Data covering 29,498 emerging market funds showed that bond funds gained a significant $1.58 billion in inflows, the largest amount in five weeks. Equity funds, meanwhile, saw outflows easing to a four-week low of $247 million.
(Source: Reuters)
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
