Thursday, 5 March 2015

Investor sentiment sours from US equities towards Eurozone and Japan

Data from Markit on exchange traded funds reveal investor appetite moving with divergent outlooks for central bank policy. The sharpest outflows of funds exposed to US equities for six years suggest investors are worried about the impact of tighter policy at the Fed and the impact of a stronger US dollar on corporate earnings. Looser policy outlooks at the ECB and the Bank of Japan have meanwhile encouraged investors to move into these markets seeking gains associated with central bank stimulus and weakened exchange rates, the latter likely to boost exports and earnings.