ETF Flow Report

December 2022 Flow Report

Commentary from the Desk:

1/ Risky asset out of favor as well as sovereign debt. 2/ All main indices in negative territory except for Chinese equities. 3/ The Dollar Decline and the Gold Rise (again)

1/ Risky asset out of favor as well as sovereign debt. The market volatility rose while it was constantly declining since October. Major indices were in negative territory. The S&P500 and the SX5E declined by 5.90% and 4.32% respectively. Besides, CDS on EUR and US High Yield Corporate debts worsened. Selling pressures on sovereign debt pulled yields higher. The US and German 10Y yields rose by 27bps and 64bps to 3.875% and 2.57% respectively.

2/ All main indices in negative territory except for Chinese equities. All main region indices were down except for the MSCI China – as measured by the MXCN - which benefited from the reopening of the country. It rose by 5.22%.

3/ The Dollar Decline and the Gold Rise (again). The US dollar (DXY) declined further by 2.29% to 103.52. Gold rose by 3.14% to $1824.02 an ounce and tested a couple times the 50%-Fibonacci retracement as a resistance before closing above at the end of the year.

December Performance highlights

· Equity Indices: NASDAQ: -9.06%, SPX: -5.90%, MSCI WORLD: -4.34%, MSCI EUROPE: -3.58%, MXEF: -1.64%, MXCN: +5.22%

· Bonds: GER 10Y: +64bps, US 10Y: +27bps, GER 2Y: +64bps, US 2Y: +12bps

· Commodities: Gold: +3.14%, Natural Gas: -35.43%

· FX: DXY: -2.29%, USDJPY: -5.03%

From a regional perspective, European and Swiss equities were bought while US, Japan and Germany were sold. On the fixed income side, strong appetite for US government bonds.

More specifically:

· On equity indices: MSCI EMU, STOXX EUROPE OIL&GAS and the SWISS LEADER INDEX were in favour. The S&P500, MSCI WORLD ESG SCREENED, MSCI USA CLIMATE CHANGE recorded a mixed activity. The NASDAQ and MSCI JAPAN were sold.

· In fixed income: US TREASURIES on the 0-12M, 1-3Y, 3-7Y, 7-10Y were bought while the 20Y+ recorded a mixed activity.

Sources: Bloomberg RFQE, Tradeweb, DRW - Dec 2022

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