ING released several observations re: the.....>

BONDS: ING released several observations re: the latest flow data on Friday:

- "1) EM in better shape than a couple of months back, but even given return

inflows, hasn't quite made convincing escape velocity from the Covid-19 crisis.

- 2) That said, inflows to hard currency remain a +ve. Local currency funds,

though, continue to struggle to attract material inflows. The bulk of the

performance & inflows have been in hard currency emerging markets.

- 3) Default risk remains elevated & will become more acute beyond Sep when most

of the Fed's support facilities are due to be taken off the shelf. Reflected in

more cautious flows into high yield in more recent weeks.

- 4) Core yields remain hammered down, but this reflects a combination of

expectations & central bank buying rather than investor inflows. There were long

end inflows in the past week, but outflows have dominated in the past month.

- 5) Dominant theme in corporates = strong inflows. Elevated primary issuance a

factor, as issuance > redemptions.

- 6) Interesting to note return flows into inflation linked funds; a pure

relative value impact we think. And some outflows from money mkt funds."