February 3, 2017 / 10:35 AM / 8 months ago

Buoyant equity, corp debt flows show no reversal over "Trumpflation" -BAML

LONDON, Feb 3 (Reuters) - International investors pumped more money into equities, company debt and emerging markets over the past week in a sign they have yet to lose faith in “Trumpflation”, data from Bank of America Merrill Lynch showed on Friday.

Expectations of reflationary fiscal policies - dubbed Trumpflation after new U.S. President Donald Trump - sharply boosted the dollar after the Nov. 8 elections.

But those gains stalled recently on fears of damage from Trump’s protectionism, immigration curbs and most recently, his accusations of currency manipulation levelled at China, Germany and Japan.

And U.S. stocks hit record highs last month but have since failed to advance since .

BAML, which tracks investment flows for the week through Wednesday, said that “while price action was showing some Trump fatigue, post-election flow trends are not showing any major reversal.”

The bank said bond funds had received $11.5 billion, the biggest weekly inflow in seven months, while equity inflows of $12.7 billion were the largest in seven weeks.

All major equity groups took in new money, with U.S. stock funds receiving $7.8 billion, the biggest weekly total in seven weeks, while emerging equities took in $1.4 billion, the most since October 2016, the bank said.

Since the election, flows to U.S. equity funds have exceeded $65 billion, according to the data.

Within bonds too, investors focused on sectors likely to benefit from a growth/inflation pickup. Junk bonds for instance have taken new money for nine of the past 10 weeks, with a $2.2 billion inflow in the latest week, while investment-grade debt received $5.3 billion, the sixth straight week of inflows.

While government bond funds lost money, TIPS funds, which invest in inflation-protected securities, saw their eighth straight week of inflow. Emerging debt also continued to benefit, receiving $1.7 billion. (Reporting by Sujata Rao; editing by Mark Heinrich)

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