Around the world in 80 seconds

Karim Chedid, CAIA
EMEA ETF Investment & Product Strategy

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Hi everyone, welcome to Around the World in 80 Seconds. Today, I will focus on macro data and ETP flows.

On the macro data front, the reopening dynamic is still the dominant factor. We saw that in the [US] job payrolls report last week, with still-sluggish job growth but pickup in wage data, which shows that demand is outstripping supply in the labour market – a key reopening feature. We continue to focus on inflation releases this week, and when looking at PMI [Purchasing Managers’ Index] release, with recovery in services – especially contact-intensive services – continuing to accelerate, and manufacturing starting to plateau, again this keeps us focused on this lopsided reopening dynamic.

Moving on to ETP flows, there’s a clear re-risking trend coming through here, as the cyclical rotation continues. US investors are buying European equities, and so when we look at the pickup in European equity ETP flows, in May they gathered
nearly US$9B – which is the largest month in four years. Last time it was this big was May 2017, amidst the reflation trade, but we’re also seeing some pickup in buying in Japan and EM [emerging market] assets, which is signalling this broad cyclical trend broadening out. And looking at fixed income, inflation-linked bond inflows have continued at a strong pace, as well as EM debt inflows – combining that with the gold buying that has started to pick up, we look at these through the lens of weak-dollar winner trends across areas
like gold and EM local, as opposed to gold safe-haven demand. Thank you for joining us.

Hi everyone, welcome to Around the World in 80 Seconds. Today, I will focus on macro data and ETP flows.

On the macro data front, the reopening dynamic is still the dominant factor. We saw that in the [US] job payrolls report last week, with still-sluggish job growth but pickup in wage data, which shows that demand is outstripping supply in the labour market – a key reopening feature. We continue to focus on inflation releases this week, and when looking at PMI [Purchasing Managers’ Index] release, with recovery in services – especially contact-intensive services – continuing to accelerate, and manufacturing starting to plateau, again this keeps us focused on this lopsided reopening dynamic.

Moving on to ETP flows, there’s a clear re-risking trend coming through here, as the cyclical rotation continues. US investors are buying European equities, and so when we look at the pickup in European equity ETP flows, in May they gathered
nearly US$9B – which is the largest month in four years. Last time it was this big was May 2017, amidst the reflation trade, but we’re also seeing some pickup in buying in Japan and EM [emerging market] assets, which is signalling this broad cyclical trend broadening out. And looking at fixed income, inflation-linked bond inflows have continued at a strong pace, as well as EM debt inflows – combining that with the gold buying that has started to pick up, we look at these through the lens of weak-dollar winner trends across areas
like gold and EM local, as opposed to gold safe-haven demand. Thank you for joining us.

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