* Redemption day followed by post-BREXIT "buy signal"
Monday saw 7th largest day of global equity redemptions ($9.5bn) in past 10 years…largest week of outflows since 8/15 CNY devaluation...BofAML Bull & Bear Indicator triggers “buy” signal
* The BREXIT bounce
Best explained by Positioning, Policy & Price-action...peripheral rates and IG credit (Spain, Italy yields at all-time lows, iTraxx EUR back down from 100 to 85), UK gilt yields (<1% now), US staples, utilities at all-time highs, reveal hardened max liquidity-minimal growth belief; & GBP slump = key "automatic stabilizer" for UK.
* Asset Class Flows
- Equities: $20.7bn outflows (largest since Aug’15) (outflows in 11 of past 12 weeks) (note $13bn mutual fund outflows and $8bn ETF outflows)
- Bonds: $1.4bn outflows (largest since Jan’16)
- Precious metals: $2.1bn inflows (largest since Feb’16) (inflows in 23 of past 25 weeks)
- Money-markets: $3.8bn inflows
* Equity Flows
- Europe: largest outflows since Oct’14 ($5.3bn) (21 straight weeks of outflows)
- UK equity funds see $0.6bn outflows (outflows in 9 of past 10 weeks)
- EM: $1.3bn outflows (outflows in 7 of past 9 weeks)
- Japan: $0.3bn inflows (inflows in 6 of past 8 weeks)
- US: $11.6bn outflows (largest in 8 weeks)
* Fixed Income Flows
- $3.4bn outflows from HY bond funds (largest since Jan’16) (outflows in 8 of past 9 weeks)
- $0.4bn outflows from bank loan funds (largest since Feb’16)
- 17 straight weeks of inflows to IG bond funds ($1.8bn)
- Small $53mn outflows from EM debt funds
- 41 straight weeks of inflows to Munis ($0.7bn)
- Outflows from Govt/Tsy funds in 17 of past 19 weeks ($0.1bn)