Money market funds attract massive inflows as bond selloff bites
TLT•Global money market funds drew a net $153.81 billion in the week ended October 7, their largest weekly net purchase since May 6, as a bond selloff and inflation fears pushed investors toward safer assets. Global bond funds gained $26.03 billion, while equity funds received $560 million.
1. Money market inflows surge
Investors bought a net $153.81 billion in global money market funds in the week ended October 7, the largest weekly net purchase since May 6. The article cited a global bond selloff, concerns over government debt in parts of Europe and lingering inflation fears.
2. Yields reach multiyear highs
French 10-year bond yields reached 4.994%, a 24-year high, amid concerns about the country's budget deficit exceeding 5% of GDP and a potentially divisive presidential election next year. The U.S. 10-year Treasury yield climbed to a 24-1/2-year high of 5.3645% on Wednesday, as higher oil prices raised concerns that inflation could persist longer than expected.
3. Equity and bond fund flows
Global equity funds received $560 million, their smallest weekly inflow in three weeks. European and Asian equity funds gained $6.19 billion and $6.16 billion, while U.S. equity funds lost $5.11 billion. Global bond funds drew $26.03 billion, and gold and other precious metals funds recorded $1.41 billion in purchases.
