* Weekly flows: strong inflows to both equity ($5.0bn) and bond funds ($5.3bn), but biggest outflows from precious metals in almost 3 months.
* Banks: largest inflows in 12 weeks...clear sign of risk-on sentiment.
* HY: 2 straight weeks of inflows following capitulation out of asset class...as expected bounce in HY returns has coincided with new highs in SPX (Chart 1).
* Europe: renewed equity inflows after 7 straight weeks of redemptions...aided by ECB hopes and (until today) geopolitical calm.
* EM: 12 straight weeks of inflows (longest inflow streak in 18 months)...EM no longer contrarian (Chart 2)...our tactical sell-signal from EM Flow Trading Rule last week means EM vulnerable near term.
- Equities: $5.0bn inflows (note divergence between $7.8bn ETF inflows and $2.8bn long-only redemptions); ETF’s with biggest inflows this week include XLI, XLF, IWM and SPY (Table 1)
- Bonds: $5.3bn inflows (lion’s share into IG bonds)
- Precious Metals: $0.4bn outflows (largest since Jun’14)
* Equity flows
- Europe: first inflows in 8 weeks ($1.6bn)
- EM: $2.4bn inflows (12 straight weeks and longest inflow streak since Feb’13)
- US: small $0.3bn outflows (masks divergence between $5.5bn into ETFs and $5.8bn out of LO funds)
- Japan: $0.9bn outflows (largest since Jun’14)
- Financials see largest inflows ($0.6bn) in 12 weeks
* FICC flows
- 36 straight weeks of inflows to IG bond funds ($4.3bn) (Chart 3)
- $1.0bn inflows to HY bond funds (2 straight weeks)
- $1.1bn outflows from Govt/Tsy funds (first outflows in 8 weeks)
- EM debt funds see inflows for first time in 4 weeks ($0.5bn)
- 7 straight weeks of outflows from floating-rate debt ($0.2bn)