ANZ’s latest Portfolio Flow report has just hit the inbox, and it shows once again that funds are leaking from emerging markets, and at an accelerating rate.
The bank cited data from EPFR, which tracks money flows. This shows: “portfolio outflows from Emerging Asia rose for a second consecutive week, to US$2,943m (from USD2,094m) in the week ending 5 March. Foreign selling of Asian equities rose further to US$2,650m from US$1,771m, but bond outflows eased to US$293m from US$323m.”
This is no big deal for Australia. Emerging markets have been losing cash for a year now, in what ANZ calls the “reversification” (as opposed to diversification) trade as money flows back into developed markets.
Indeed, the US stock market saw an inflow of more than US$9 billion last week, with European stocks gaining US$1.3 Billion. But
ANZ as notes: “Reflecting easing political tension in Ukraine earlier this week, safe haven flows reversed with US bonds seeing the first outflow of funds (US$3.7bn) in nine weeks.”
Perhaps explaining the Aussie Dollar’s persistence in the face of the RBA wishing it lower, Australia is also benefiting as equity flows are again positive and bond flows less negative.