LONDON (Reuters) – Precious metals loved their second biggest inflows within the week to Wednesday, Bank of America Merrill Lynch mentioned on Friday, as festering commerce tensions and world development woes triggered a rush for protected haven property.
A complete of $2.eight billion was sucked into valuable steel funds through the week, whereas bond funds took in $9.2 billion of their 38th week of inflows. Meanwhile U.S. fairness funds suffered their ninth largest outflows ever, dropping $16.four billion, mentioned BAML citing EPFR knowledge.
The strikes come as buyers grapple with an almost 15-month commerce battle between the United States and China; warnings that Germany, Europe’s largest economic system, is probably going heading into recession; and a slowdown in China’s industrial output.
Reflecting buyers’ nervy outlook, BAML’s “Bull & Bear” gauge moved again to 0.7 from 0.eight the week earlier than, exhibiting investor positioning continues to be “extreme bearish”, the financial institution mentioned.
The financial institution mentioned it remained “irrationally bullish” in its 2019 outlook as bearish investor sentiment and determined central banks and coverage makers, along with a bond “bubble”, led to an “overshoot” in credit score and fairness costs this autumn.
But BAML was “rationally bearish” for 2020 because the bond bubble pops and a trough in credit score spreads, inflicting “Wall St deleveraging & Main St recession”, it added.
Reporting by Tom Arnold; Editing by Karin Strohecker and Alison Williams