The easing of US inflation reignites expectations of Fed rate cuts, prompting funds to flow back into global stock funds.

Noted, according to data from LSEG, in the week ending December 25, global stock funds witnessed significant inflows of funds, reversing the trend of large-scale net sales from the previous week. The release of a mild inflation report in the United States and news of the government avoiding a shutdown boosted investor confidence, prompting them to embrace risk assets once again. According to data from LSEG, investors injected a massive $34.38 billion into global stock funds, the largest in six weeks, after a net sale of $36.84 billion the previous week. A report released by the US Department of Commerce showed that the Personal Consumption Expenditure Price Index rose 0.1% in November, lower than analysts' expectations, reigniting hope in the market for further interest rate cuts by the Federal Reserve next year. US stock funds attracted $20.56 billion in inflows, the seventh consecutive week of net inflows in eight weeks. At the same time, European and Asian funds also received significant inflows of $5.11 billion and $2.84 billion respectively. Global sector stock funds experienced a net outflow for the third consecutive week, totaling $2.48 billion. Specifically, investors withdrew $0.81 billion from healthcare funds, $0.639 billion from non-essential consumer goods funds, and $0.48 billion from metals and mining funds. Global bond funds experienced a net outflow of $1.47 billion for the second consecutive week, following 51 weeks of consecutive inflows until December 11. Global high yield bond funds saw the largest outflow in eight months, with a net sale of $2.99 billion this week. In contrast, investors injected $1.78 billion into short-term bond funds. Investors injected a net of $16.95 billion into money market funds, reversing two weeks of net sales. In terms of commodities, gold and precious metals funds attracted a net inflow of $1.25 billion, the largest single-week inflow in nine weeks, while energy funds saw a net sale of $2.12 billion. Meanwhile, data covering 29,565 emerging market funds showed that stock funds continued their trend, with a net sale of $1.75 billion for the seventh consecutive week, while bond funds experienced a total net outflow of $0.957 billion.