Fed Minutes, Inflation Data and $65B Fund Flows Take Center Stage

What happened

Investors put $65.04 billion into global equity, bond and money-market funds in the week to Aug. 12. Equity funds drew $18.62 billion for a 12th straight week, bond funds took in $18.01 billion, the most in four weeks, and money-market funds added $28.41 billion. This week’s calendar includes minutes from the July 28-29 FOMC meeting, Japan’s Q2 GDP, UK inflation, U.S. industrial production, and earnings from Walmart, Home Depot, Target, Lowe’s and Deere. Brent crude rose 6.0% to $88.52 over the past week.

Why it matters

The allocation shows investors still seeking equity exposure while hedging with cash and bonds near record highs. The FOMC minutes and inflation prints may shape expectations for further rate moves, and the Bank of Japan is seen possibly raising its policy rate by 25 basis points to 1.25%. J.P. Morgan estimates a strong El Niño could add about 0.7 percentage point to global food inflation at its peak, while tensions around the Strait of Hormuz keep oil and inflation risks elevated.