In line with the US Federal Reserve Chair Jerome Powell’s comments on U.S. inflation and a solid employment report, global equities funds saw significant outflows in the week leading up to February 7 as markets reevaluated bets regarding the Fed’s interest rate choices.

Investor withdrawals from global equity funds were a net $13.38 billion, the largest amount in a single week since June 21, 2023, according to LSEG statistics.

The U.S. Labour Department report that revealed faster job growth and the biggest pay increase in over two years in January influenced this response and changed the forecasts for rate reductions.

The largest weekly withdrawal from U.S. equities funds since December 2022, net selling of around $11.74 billion occurred.

Quite the reverse; investors poured $1.33 billion into European funds and $3.44 billion into Asian funds.

There were net disposals of roughly $608 million, $526 million, and $448 million from the energy, utilities, and metals and mining funds, respectively. On the other hand, inflows into healthcare funds were almost $760 million.

Global bond funds, valued at $6.33 billion on a net basis, had inflows for the seventh straight week.

Global bond funds denominated in dollars were given an impressive $2.19 billion, the most since at least March 2022. Inflows totaling $593 million and $553 million were received by global government and corporate bond funds, respectively.

At the same time, money market funds experienced a second consecutive week of net buying, bringing in almost $26.95 billion in inflows.

Energy funds witnessed net purchases of commodities totaling $255 million, the highest amount since October 25. Nonetheless, there were $423 million in withdrawals from precious metal funds, marking the second consecutive week of net selling.

According to data spanning 29,635 emerging market funds, bond funds saw $314 million in net purchases for the first time since January 17, while equity funds saw a little net selling of $25 million.

(Adapted from FXEmpire.com)