BofA’s month-end rebalancing mannequin factors to demand for the likes of the euro, sterling, and yen with greenback flows set to be extra impartial on the whole. Their mannequin works off a traditional 60/40 fairness/bond portfolio and flows are estimated by evaluating asset efficiency throughout nations.
That implies inflows into the euro of about +1.0δ, backed by the relative underperformance of European shares this month. Equally, the mannequin factors to inflows of about +0.9δ within the pound amid the lagging efficiency of UK property. On the steadiness, the mannequin additionally signifies reasonable inflows into the yen forex of about +0.6δ, citing softer Japanese asset efficiency towards its friends.
The majority of the promoting is indicated for rising market (EM) currencies, in line with BofA. They see outflows of round -1.5δ amid stronger EM asset efficiency earlier this month. As for the greenback, the flows are largely extra impartial with simply marginal outflows of round -0.2δ indicated.