The HSBC preliminary PMI last week printed in the contraction zone, which seemed to awaken traders to the fact that emerging markets and China are slowing down.
It caused a riot in markets, with the Dow losing more than 500 points last Thursday and Friday, Gold rallying sharply and the Aussie dollar coming under intense pressure once again.
But today’s charts from the ANZ show that investors have been running from emerging markets for some time now.
The ANZ said in a note Friday:
Portfolio outflows from Emerging Asia intensified in the week ending 22 January. Based on EPFR data, a total of USD1.4bn flowed out of equity and bond funds from the region, marking the 8th consecutive week of outflows.
It’s not much better for Australia and even though the acute weakness in the Aussie on Friday afternoon was on the back of some well timed comments from RBA Board Member Heather Ridout, the reality is investors have been selling Australian assets for some time.