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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US
The $304B increase in money market fund assets since the start of March amid the turmoil triggered by Silicon Valley Bank and other institutions is thought to have come largely from a movement out of bank deposits into higher-yielding assets.
- That's certainly a large part of the story, with a slower pace of deposit outflows in late March mirroring the pace of MMF growth slowing (+$65B in the week to to Mar 29, vs around $120B in each of the prior two weeks - more detail in our latest US Commercial Banking Update).
- But a look within MMF asset composition shows that it's clearly been safety that has been sought rather than returns: Government-invested funds have seen assets explode, up $348B since the week of Mar 8, vs a drop of $37B in Prime funds (MMF AUM is up $304B on net).
- Prime MMFs offer higher yields but bear relatively higher risk to investors.
- It will be telling whether both MMF inflows as a whole, and their composition, shift in the weeks ahead as it appears the most acute fears over the banking system have abated but bank depositors are also recognizing the potential for higher returns elsewhere.
Source: ICI, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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