Inflows into industrial metal ETPs hit a 5-month high, totalling US$86m. Despite the choppy economic data, investors were keen to accumulate cyclical assets, lifting flows to into ETFS Industrial Metals (AIGI) to a 2-year high of US$23.3m and raising flows into ETFS Copper (COPA) to US$38.5m last week. As the global recovery gains traction we expect flows into industrial metals to continue.
The rotation toward cyclical assets sees US$9.9m into silver ETPs and outflows of US$73.6m from gold ETPs. Silver with its industrial uses was favored by investors as they move into more to cyclical assets.
Profit taking drives US$6.6m out of ETFS WTI Crude Oil (CRUD). After 9 consecutive days of gains, investors looked to reduce long positions. Expectations of a near-term correction appear to be developing, with ETFS Daily Short WTI Crude Oil (SOIL) seeing outflows of US$9.9m. With crude prices trading near the top of recent ranges, an unexpected jump in the price of WTI could also trigger comments about deployment of strategic reserves. Downside pressure also rose as WTI stockpiles increased last week and remain above longer-term averages.
Key events to watch this week: A number of surveys will help confirm the strength of the global recovery including the Euro area and US PMIs and German IFO and ZEW business sentiment surveys. Meanwhile the minutes of the January FOMC and February BoE meetings will attract a lot of interest given the over-interpretation of the previous month’s minutes when central banks first started to discuss the timing of an exit from QE.