LONDON (Reuters) – Assets invested in U.S. money market funds reached a record $4.9 trillion this year.
Money market funds invest in short-term, highly liquid securities such as cash and short-term bonds.
So far this year, investors have put $192 billion into cash, with $18.1 billion added in the week to Wednesday, BofA said. They said he invested $68.1 billion in cash a week ago, an amount he has never seen since the severity of his 2020 pandemic.
Market expectations of further interest rate hikes by the US Federal Reserve have pushed US yields higher and made money market funds more attractive. Yields on six-month US Treasury bills hit 5.34% on Tuesday, the highest since 2006.
Other regions saw $8.2 billion in weekly inflows into bond funds, $500 million in outflows from equities and $4 million in outflows from gold, according to the report.
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According to BofA, Japanese equity funds recorded their biggest outflow ($3 billion) since April 2018, a reversal given that Japanese equities have been favored by foreign investors in recent weeks. bottom.
The BofA also warned that the rapid rise in global interest rates and the market’s pricing of further rate hikes is creating what they call a “mad atmosphere in March”.
“[There are]many potential catalysts for a systematic deleveraging event that will trigger the end of policy panic and Fed tightening; We must be ready to put cash into new leadership assets that will form.” they said.
The BofA said these ‘feelings’ could worsen if US February payrolls do not soften later on Friday.
The latest sign of stress in financial markets was bank stocks around the world plunged on Thursday and Friday after the Silicon Valley Bank (SIVB.O), which lends to the U.S. tech sector, including start-ups, was forced into action. bottom. Raise funds to strengthen your balance sheet.
Reported by Arun Jong.Editing by Amanda Cooper and Christina Fincher
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