Chillin' out till it needs to be funded
Despite the seeming market opportunity for Global funds in Europe with yields recovered to a 3 month low and credit markets busy in the new year without a whiff of default, the pending Greek discussions managed to pour water on Europe specific and profitable Euro funds even as at least $3.2 bln added to Emerging markets equities in just one week ending Feb 1. The other four weeks that count to 2012 also added another $8 bln for a $11.3 bln addition to equities alone in January 2012
Meanwhile even bond funds added a $1.2 bln last week and as expected Asian currencies recovered with a strong showing for the first month. The preferred Asdian currency trade has now moved from the few emerging markets banks to a wider audience, probably also for those who got caught on the wrong side of the Euro, shorting it in a recovery scenario accelerated by the ECB and by Germany’s strong performance.
The global indices are up 8.4% for the month, Emerging market indices 15% and even European stocks have gained 3-4% split from the gains for the Currency incl the HEDJ ETF that nullifies FX effects from the european equity trade
Infact according to the FT, the interbank/money markets in Asia had so much extra liquidity in the month there performance was likely affected adversely.