Funds have been actively pouring into global funds amid concerns about the U.S. government debt ceiling

May 26 (Reuters) – Global money market funds received a fifth consecutive week of inflows in the seven days ending May 24 as investors began buying safer assets, cautiously as the deadline for the U.S. debt ceiling increase approaches.

About $17.67 billion has flowed into global money market funds, the most in three weeks, according to Refinitiv Lipper data.

US money market funds received an inflow of $39.89 billion, but investors withdrew $15.76 billion and approximately $30 million respectively from European and Asian funds.

US President Joe Biden and Republican Speaker of the House Kevin McCarthy are close to a two-year deal to raise the national debt ceiling, which is currently capped at $31.4 trillion, but time is running out.

Investors pulled $4.14 billion from global equity funds, the sixth consecutive weekly outflow.

Investors pulled out of health, industry, and energy funds, taking $414 million, $183 million, and $174 million, respectively, but the consumer sector raised $286 million.

Net purchases of global bond funds this week totaled $6.97bn, the largest weekly inflow since April 5.

Global government bond funds posted their fifth weekly inflow of $3.85 billion, while high yield bond funds raised $649 million net, the first net inflow in four weeks.

Among commodity funds, investors invested in precious metals funds for the fifth week in a row, paying USD 388 million to them, but leaving energy funds with USD 219 million net.

Data from 23,986 emerging markets funds showed equity funds lost $831 billion, their first weekly outflow in four weeks, while bond funds reported a fifth straight week of net sales of $472 million.

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(Gaurav Dogra and Patturaja Murugabupati in Bangalore)


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