| LONDON, March 31
LONDON, March 31 European stocks have had their
best week in over a year as fading faith in the Trump trade has
pushed investors across the Atlantic to where the euro and the
region's economy may be heading higher.
Figures from Bank of America Merrill Lynch (BAML), which
track investment flows up until Wednesday, showed $1.5 billion
being pumped into European equities and a second straight week
of outflows ($0.8 billion) for U.S. shares.
BAML's analysts said it was a case of "Europe in vogue" amid
a growing belief that the right-wing Marine Le Pen will not win
the French election, but also after U.S. President Donald
Trump's image took a hit as saw his first major policy change
"The AHCA (Obamacare) vote led to outflows this week from
aggressive fiscal stimulus trades (infrastructure, materials, US
value)," BAML said.
"It may also have encouraged inflows to bonds (ex. high
yield bonds) and further acceleration of flows to non-U.S.
Listing the start of the year's main winners and losers;
global equities rose 7 percent outperforming the 2 percent gain
in bonds. The biggest "pain trade" meanwhile was the dollar
which fell 2 percent and commodities which slumped 5 percent.
Bonds, which are seen as a low risk asset to hold, have seen
inflows in 13 of the last 14 weeks, though it includes nine
straight weeks on inflows in riskier emerging market debt funds
and 16 uninterrupted for inflation-linked TIPS funds.
As the safer end again, precious metals have gained for
seven out of the last nine weeks.
Broadly spirits are still high though it seems. A 1-10 "Bull
& Bear indicator" BAML compiles remains at 7.0, just shy of a
contrarian "sell signal". "We believe investor bullishness is
light and reluctant," the bank said.
(Reporting by Marc Jones; Editing by Alison Williams)