ETF Securities Weekly Flows Analysis – Precious metals outflows continue ahead of this week’s Fed meeting
- Second consecutive week of gold selling ahead of March Fed meeting
- Strong inflows into Equity ETP products
- Opportunistic inflows into Crude Oil as WTI prices fall below US$50
- Strong cyclical data continue to support inflows into Industrial Metals
- Outflows from Euro and GBP ahead of Dutch Elections and Article 50 vote
Precious Metals outflows continue ahead of this week’s Fed meeting. For a second straight week Gold (-US$71mn) and Platinum (- US$9mn) saw outflows as expectations for a March rate hike from the Federal Reserve continued to build. Strong employment data (ADP, jobless claims) sent gold prices to below US$1,200/oz, its lowest level since the start of February. The market will be watching any potential changes to the Fed’s dot-plot (rate forecasts) this week for signals of how many rate hikes to expect this year.
Small inflows to Crude Oil despite the fall in prices last week. WTI suffered its sharpest one-day sell-off for 13 months last Wednesday, falling below US$50/bbl on the back of US inventories rising for a ninth straight week to a new high this year. We saw opportunistic inflows into our Crude Oil ETP of US$10mn on the drop in prices. Despite OPEC’s efforts to cut production, US oil production continues to recover and pressure oil prices to the downside.
Strong inflows into Equity ETPs. Last week saw continued inflows into our tech thematic ETPs: Robotics (US$32mn) and Cyber Security (US$10mn). The tech sector continues to be one of the best performing sectors globally as investors rotate away from pure value sectors such as commodities into sectors with characteristics of both value and growth such as Tech. We continue to see further structural supports for both Robotics and Cyber Security over the medium-term.
Fourth straight week of inflows into industrial metals. Strong manufacturing data around the world continued to support inflows into industrial metals last week: Aluminium (US$2mn) and Nickel (US$3mn).
Outflows from the EUR and GBP. The GBP saw outflows (-US$5mn) as the government suffered setbacks to its proposal to exit the EU as well as softer UK consumer data. We also saw outflows from the EUR (-US$8mn) ahead of the Dutch elections this week. The polls still indicate a low likelihood of Geert Wilders being able to form a coalition if his party wins.
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