© Reuters. FILE PHOTO: A man watches an electric board showing Nikkei index outside a brokerage at a business district in Tokyo, Japan, June 21, 2021. REUTERS/Kim Kyung-Hoon
(Reuters) – Global equity funds received their lowest inflow in five weeks in the week ended Nov. 17, hit by soaring inflation levels and fears of an economic slowdown.
Net purchases in global equity funds slipped to $5.15 billion, the lowest amount since the week ended Oct. 13, Refinitiv Lipper data showed.
Graphic: Fund flows into global equities bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkwgqzpx/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg
Expectations of a U.S. interest rate hike as early as mid-2022 got a boost last week after data showed U.S. consumer price inflation hit its highest level in 31 years in October.
In addition, China’s October factory gate prices rose at the fastest pace since 1995, while British inflation has hit a 10-year high.
U.S. and Asian equities funds faced outflows of $1.98 billion and $0.35 billion, respectively.
Meanwhile, European equities funds lured a net $5.42 billion in inflows after European Central Bank President Christine Lagarde pushed back against widespread rate hike expectations in the market.
Among sector funds, technology and consumer discretionary funds received $907 million and $473 million respectively in inflows, while industrials and healthcare funds faced outflows of $643 million and $411 million respectively.
Graphic: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/xmpjorxgmvr/Global%20fund%20flows%20into%20equity%20sectors.jpg
Global bond funds drew $6.22 billion in net buying, a 39% decline from the previous week.
Inflation-protected funds secured $1.91 billion in net buying, while government bond funds pulled in $3.26 billion, the biggest weekly inflow since Aug. 4. On the other hand, corporate bond funds saw outflows worth a net $655 million.
Graphic: Global bond funds’ flows in the week ended Nov 17 – https://fingfx.thomsonreuters.com/gfx/mkt/zdpxonwoovx/Global%20bond%20funds’%20flows%20in%20the%20week%20ended%20Nov%2017.jpg
Meanwhile, global money market funds received $5.07 billion in net purchases, marking the smallest inflow in four weeks.
Data for commodity funds showed precious metal funds drew a net $817 million after seven straight weekly outflows as gold prices rallied to a five-month peak this week. Energy funds attracted $124 million, marking a third consecutive week of inflows.
An analysis of 23,953 emerging market funds showed investors purchased equity funds for a third subsequent week worth a net $431 million but sold $1.75 billion in bond funds.
Graphic: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/gkplgdzmrvb/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg
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South Korean exports dropped 14% in November, the highest in 2.5 years
South Korea’s exports fell 14 percent year-on-year to $51.91 billion in November, preliminary data from the Ministry of Commerce, Industry and Energy showed. The November drop was the biggest in 2.5 years since May 2020 and was caused both by the deteriorating global economy, which even a Google price chart showed, and a truckers’ strike in the country.
South Korea exports 2022 – reasons for the drop
Exports fell for the second month in a row. Analysts on average expected an 11% decline, according to Trading Economics. Respondents to MarketWatch predicted a 10.5% decline.
Shipments of semiconductor products overseas, the country’s top export item, fell 29.8%; petrochemicals fell 26.5% and steel exports fell 10.6%. Meanwhile, exports of automobiles jumped 31% and petroleum products 26%.
Exports to China, South Korea’s largest trading partner, fell by 25.5%, and to Asian countries – by 13.9%. Below, supplies to the USA grew by 8% and to the European Union – by 0.1%.
In January-November exports rose by 7.8% on the same period last year and reached a record $629.1 billion.
South Korean imports rose 2.7% to $59.2 billion in November, marking the 23rd consecutive month of gains, but the current rate of growth is the lowest since November 2020. Experts had predicted an increase of only 0.2%.
South Korea’s trade deficit last month was $7.01 billion, compared with a surplus of $2,973 billion a year earlier.
The negative balance was recorded for the eighth month in a row. As a result, by the end of 2022, the country may record a foreign trade deficit for the first time since the financial crisis in 2008.
Earlier we reported that the UN estimates the cost of humanitarian aid in 2023 at a record $51 billion.
The UN estimates humanitarian aid costs in 2023 at a record $51 billion because of an impending humanitarian crisis
Joint humanitarian operations will require a record $51.5 billion in 2023 to address urgent problems.
The UN Office for the OCHA estimates that 339 million people will need urgent aid in 2023. At the same time, OCHA called on donor countries to provide funds for assistance in 2023 to the 230 million people most in need, living in 68 countries.
Griffiths explained that aid is needed not only for people experiencing conflicts and disease outbreaks. but also for those suffering the effects of climate change, such as people in peninsular Somalia facing drought and those in Pakistan experiencing severe flooding. For the first time, the growing humanitarian crisis has brought the number of displaced people worldwide to the 100 million mark. Also worsening an already bad situation is the worldwide coronavirus pandemic, which affects the poor. Note that the general economic crisis has begun to negatively affect even the Netflix price chart.
Earlier we reported that house prices in the UK fell by 1.4% in November.
Average house prices in the UK fell 1.4% in November
Average house prices in the UK fell 1.4% in the previous month in November to 263,788 thousand pounds (about $319,000), according to the British mortgage company Nationwide Building Society.
The decline was recorded at the end of the second consecutive month and was the most significant in almost 2.5 years – since June 2020. Analysts on average had forecast a decline of only 0.3%, according to Trading Economics.
Are house prices in the UK going to fall even more?
Residential real estate prices in November compared to the same month last year increased by 4.4%. At the same time, experts expected a larger increase of 5.8%. The growth rate slowed down significantly compared with 7.2% in October. Because of the difficult economic situation, British investors are investing in other instruments. The Microsoft price chart, for example, is showing potential for growth, so many are interested in the U.S. stock market.
“The market looks set to remain under pressure in the coming quarters. Inflation will remain high for some time, and interest rates are likely to continue to rise,” believes Nationwide Senior Economist Robert Gardner. – The outlook is unclear, and much will depend on how the overall economy behaves, but a relatively soft landing is still possible.”
Earlier we reported that Sanctions Circumvention was included in the EU’s list of criminal offenses.
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