How did markets react to the interest rate hikes from both the US Federal Reserve and the European Central Bank? In a week where nonfarm payrolls in America reported a job increase way above the initial expectations, we use EPFR’s Fund Flows and Allocations data to deep dive into the latest investor sentiment trends.
EPFR fund flow data is trusted by leading media across the globe. Check out our May 2023 citations, featuring Nikkei Asia, Bloomberg and CNBC.
Investors were expecting quarter-point interest rate hikes from the US Federal Reserve and European Central Bank (ECB) in early May. They got them, along with the collapse of another American regional bank, a warning from Treasury Secretary Janet Yellen that the US may not be able to pay its bills in June if the debt ceiling standoff persists and more violent protests against pension reform in France.
Market news this week are dominated by rumors of another possible interest rate rise from both the US Federal Reserve and the European Central Bank, as well as the latest US job market update. How is money moving in the meantime? EPFR’s Global Head of Customer Solutions, Steve Muzzlewhite, takes a look at our latest fund flow data.
Off the wires: Bitcoin is one year away from a major technical event. History suggests the start of another bull run
Bitcoin’s next “halving” is expected to take place in 2024. These events take place when Bitcoin miners have added 210,000 “blocks” to the blockchain leger and are marked by a halving of the Bitcoins that miners get for adding each block. Given the implications for future supplies of Bitcoin, these ‘halvings’ usually push Bitcoin’s price significantly higher, both in the run up to the event and for several months afterwards. This time around seems – so far – to be conforming to the pattern: Bitcoin’s price has risen steadily in recent weeks.
According to CNN, annual inflation dropped in March 2023 for the ninth consecutive month, and grocery prices fell month-on-month for the first time since September 2020. While the CPI has cooled off – at least temporarily – investors are not treating the news as a green light for the road back to riskier asset classes. With fear far from banished, cash remains king.
Latest EPFR fund flow data reports outflows for equity funds and money market funds, and inflows towards bond funds, and China and India equity funds.
With mud season keeping the conflict in Ukraine deadlocked and the next round of major central bank meetings still a fortnight away, investors turned their attention to taxes, corporate earnings and China’s economy during the third week of April.
From time to time, EPFR’s clients alert us to anomalous flows into exchange traded funds (ETFs) that occur on a specific day and for a specific fund. Given our awareness of these types of flows, and the granularity of our databases, EPFR’s quant team decided it was high time they dove into our ETF database and conducted a systematic analysis of these events.
Kirsten Longbottom, Research Associate at EPFR, is in charge of delivering our fund flows highlights this week. Using our Fund Flows and Allocations data and insights, we put our focus on equity flows and sector allocations.