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CREDIT MACRO: Fund Flows

CREDIT MACRO
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  • Data for the week ending Wednesday point to continuing flows into all $/€/£ IG & HY. The pace of IG inflows did moderate.
  • More timely ETF data has turned net flat for the rolling week; weakness in LQD ($IG's largest) while HY still looks skewed to inflows. €IG's IEAC mute as usual.
  • Outside credit, US and Europe govvies turned back into inflows while floating rate exposed leveraged loans continued to see outflows. US equity outflows picked up pace while EM equities still held onto inflows.
  • We noted credit and in particular HY inflows continuing in the face of a risk-off moves and flows was impressive last week - a observation that still holds for this week. S&P rebounded on levels but that was tech led, flows are still weak for them and credit flows have come despite yields holding at 2yr lows.
  • Ongoing credit flows is helping meet the seasonal pick-up in supply; NIC's and book cover on avg. for €IG deals this week were not noticeably weaker vs. YTD - but on softer supply (3-day issuance window). $IG primary metrics began firm but seem to have weakened through the week on heavy supply ($38b vs. c$35b) - and perhaps weighed on by ongoing strength in rates (-8bps on the week).
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  • Data for the week ending Wednesday point to continuing flows into all $/€/£ IG & HY. The pace of IG inflows did moderate.
  • More timely ETF data has turned net flat for the rolling week; weakness in LQD ($IG's largest) while HY still looks skewed to inflows. €IG's IEAC mute as usual.
  • Outside credit, US and Europe govvies turned back into inflows while floating rate exposed leveraged loans continued to see outflows. US equity outflows picked up pace while EM equities still held onto inflows.
  • We noted credit and in particular HY inflows continuing in the face of a risk-off moves and flows was impressive last week - a observation that still holds for this week. S&P rebounded on levels but that was tech led, flows are still weak for them and credit flows have come despite yields holding at 2yr lows.
  • Ongoing credit flows is helping meet the seasonal pick-up in supply; NIC's and book cover on avg. for €IG deals this week were not noticeably weaker vs. YTD - but on softer supply (3-day issuance window). $IG primary metrics began firm but seem to have weakened through the week on heavy supply ($38b vs. c$35b) - and perhaps weighed on by ongoing strength in rates (-8bps on the week).