LONDON, March 25 (Reuters) – Commodity prices are on track for their biggest rise in more than a century, while fixed income assets see the longest run of outflows from the financial sector since the war in Ukraine exacerbating inflationary pressures following the end of the coronavirus lockdown, BofA said on Friday.
“Commodity prices are on track for best year since 1915,” analysts at the investment bank said in a weekly note, citing a host of factors including the pandemic, lockdowns, civil unrest, war, excess of monetary and fiscal stimulus and lagging supply chains that resulted in “epic” inflation.
Similarly, the bank said government bonds were in their worst year since 1949 and “negative yields on debt are quietly disappearing” from the market as central banks embark on a tightening cycle and raise interest rates to control inflation.
According to EPFR data, BofA said weekly capital-to-fund flows recorded $13.2bn in cash, $2.1bn in gold, $200m in bonds and $1.9bn in equities. In notable flows, bonds experienced 11 consecutive weeks of exoduses, the longest streak since the fourth quarter of 2008.
BofA’s future asset performance gauge, a market indicator that suggests when to buy or sell risky assets based on a combination of security prices, moved into buy territory for the first time since March 2020.
BoFA analysis shows that global stocks are up 8% in the 12 weeks since the buy notice.
(Reporting by Julien Ponthus. Edited in Spanish by Marion Giraldo)