Aurelia Butler

Investors pumped a robust $21.8 billion into global equity funds during the week, the biggest amount since Nov. 13, LSEG Lipper data showed.U.S. equity funds led with net inflows of $8.85 billion, while European and Asian equity funds also saw substantial inflows, receiving $5.92 billion and $4.58 billion respectively.”The underlying strength of the U.S. economy and further interest rate cuts should provide additional momentum,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.Despite economic hurdles in the euro zone, the European Central Bank is expected to make its fourth rate cut of 2024 this month due to slowing inflation, with continued easing expected through June 2025, fostering a favorable environment for reasonably valued European stocks, he said. By sector, financials and industrials attracted a noticeable $813 million and $573 million, respectively. The healthcare and technology sectors, meanwhile, witnessed outflows totaling a net $790 million and $620 million, respectively.Global bond funds were popular for the 50th successive week with net investments worth $10.82 billion during the week.High yield, dollar denominated medium-term and loan participation funds stood out as these funds drew $1.69 billion, $1.43 billion and $880 million, respectively in inflows.Global money market funds, meanwhile, saw a net $169.4 billion worth of purchases, the largest for a week since early April 2020.Among commodities, gold and precious metal funds lost a marginal $65 million in outflows following two weekly inflows in a row. Energy funds, meanwhile, gained $78 million worth of inflows.Data covering 29,635 emerging market funds showed that weekly outflows for equity funds eased to a four week low of $834 million during the week. In parallel, bond funds saw their first weekly inflow in seven weeks, to the tune of $872 million on a net basis. More

TOKYO/LONDON (Reuters) -Major currencies remained on edge on Friday as markets awaited U.S. job data and digested a politically turbulent week, with French President Emmanuel Macron saying he would appoint a new prime minister in the coming days. In the spotlight will be the U.S. non-farm payrolls report for November, due later in the day, as investors look to second-guess the pace of future Federal Reserve rate cuts. “It’s almost as if we haven’t had a real update on the health of the state of the U.S. labour market for two months, given all the anomalies there had been in the October report,” said Fiona Cincotta, senior market analyst at City Index. U.S. job growth slowed sharply in October, skewed by disruptions from hurricanes and strikes by aerospace factory and dock workers. The dollar index, which measures the greenback against six other currencies, was up 0.07% at 105.79 on Friday after slipping towards a three-week low in the previous session.Facing political turmoil on its own turf, the euro traded down at $1.0582 after rebounding on Thursday as French bonds stabilised.Despite a volatile week, the euro was on track to post a second weekly gain versus the dollar, while it tracked weekly losses against both the Swiss franc and the pound. In France, Macron met allies and parliament leaders on Thursday as he sought to swiftly appoint a new prime minister to replace Michel Barnier, who resigned a day after opposition lawmakers voted to oust his government.For now, the European Central Bank is not expected to react to heightened political instability in Europe when it meets next week, with traders and economists fairly certain it will trim rates by 25 basis points on Dec. 12.U.S. JOBS REPORT IN FOCUSU.S. non-farm payrolls are expected to have increased by 200,000 last month, according to a Reuters survey, after rising by only 12,000 in October, the lowest since December 2020. The unemployment rate was forecast to rise to 4.2%.Markets now see about a 72% chance that the Federal Reserve will deliver a 25-basis-point rate cut when it convenes on Dec. 17-18, up from 66.5% a week ago, CME’s FedWatch tool showed.City Index’s Cincotta said this week’s indicators, including private payrolls, jobless claims and services sector activity, pointed to on-target payrolls. “If we see an on-target non-farm payroll report, then I think that will support confirmation that the Federal Reserve will be cutting interest rates in the December meeting.” A stronger report could instead turn the attention to next week’s U.S. inflation data, Cincotta added. The dollar also briefly spiked against South Korea’s won after local media reported the nation’s main opposition Democratic Party saying lawmakers were on standby after receiving reports of another martial law declaration.The won weakened, leaving the dollar up 0.42% at 1419.27.The political upheaval has kept Korean markets on tenterhooks even as authorities pledged to provide “unlimited liquidity” to stabilise conditions. Elsewhere, China’s yuan was little changed against the dollar but headed for its 10th straight weekly loss amid concerns that new tariffs threatened by U.S. President-elect Donald Trump will heighten strains on the struggling Chinese economy, and whether Beijing will ease its grip on the currency to support exports.The offshore yuan traded about flat at 7.2632.In cryptocurrencies, bitcoin took a breather after catapulting above $100,000 for the first time a day earlier.It briefly slid to a one-week low and was last down 0.82% at $98,170, well off Thursday’s peak of $103,649.Trump said on Thursday he was appointing former PayPal (NASDAQ:PYPL) Chief Operating Officer David Sacks as his artificial intelligence and cryptocurrency czar.The dollar was up 0.32% against the yen at 150.55 as traders pondered the likelihood of a December rate hike in Japan.The Australian dollar fetched $0.64285, down 0.37%, and New Zealand’s kiwi slid 0.52% to trade at $0.5854 . More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.South Korea’s export-oriented economy is in greater jeopardy from Donald Trump’s trade policies than from the political crisis unfolding at home, the country’s central bank governor has said.In an interview with the Financial Times, Bank of Korea governor Rhee Chang-yong acknowledged that “critical structural reforms” to the South Korean economy and financial markets would be delayed as a result of the fallout from President Yoon Suk Yeol’s failed attempt this week to impose martial law.But he said the economic impact of the political crisis in Seoul would be “limited” when compared with the potential consequences for Korean exporters of intensifying Chinese competition and the hefty tariffs Trump is expected to impose on leading trade partners of the US.“There is a lot of uncertainty,” Rhee said. “But compared with domestic factors, the external factors are giving us a lot more uncertainty at the moment.“[Trump’s tariff threat] is one of the main reasons why we downgraded our growth forecast for this year and next year,” Rhee added.“Export growth was performing well this year, but now we have revised our export growth [projections] downwards for two reasons,” he said. “One is possible tariffs, and the other is that we find that China’s competitiveness is really growing fast, and China’s oversupply of goods within China as well as outside of China is growing very fast.”Even before this week’s political drama, South Korea’s economy, Asia’s fourth largest, was wrestling with weak domestic demand and high household debt in addition to increased competition from Chinese exporters. Last week, the central bank cut interest rates unexpectedly, with the governor citing concerns over the ‘red sweep’ in the US, referring to Trump’s victory and Republican gains. But Rhee stressed that the impact of Yoon’s martial law gambit on the country’s financial markets had been “shortlived and relatively muted”.After Yoon announced his decree on Tuesday evening, the offshore South Korean equity market index dropped more than 6 per cent, while the won weakened almost 3 per cent against the dollar.But after an emergency late-night meeting with the finance minister and chief financial regulators, Rhee pledged to deploy “unlimited” liquidity in the country’s financial markets if necessary.By the time trading opened the following morning in Seoul, Yoon had announced his intention to revoke his martial law order. Investors have remained relatively calm despite the turmoil, with the country’s Kospi stock benchmark down 6 per cent by close of trading on Thursday from Tuesday’s close.“[Our] swift and comprehensive prevention measures calmed and stabilised the financial market with rapid speed,” Rhee said.South Korea is bracing itself for prolonged political turmoil, with Yoon facing an impeachment vote in the country’s National Assembly on Saturday. But Rhee noted the South Korean economy had ridden out two presidential impeachment dramas in recent memory, in 2004 and 2017.The governor said he had been “excited” by an emerging political consensus on the need to strengthen protections for minority shareholders in listed Korean companies, although he conceded the government’s corporate governance drive would be delayed by the political crisis.But he rejected the argument made by some observers this week that Yoon’s decree and the resulting crisis had vindicated index-makers such as MSCI, which have resisted calls in South Korea for the country to be upgraded to developed market status.“I can understand if you say [South Korea’s developing market status] is because of the North Korea problem, or because of our capital controls. But I have never heard the people from MSCI say: ‘This is because your democracy is not mature enough,’” Rhee said. More

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