Bank of America Merrill Lynch

Average cash balance soars to 5.6% from 4.6% for each of the last three months, marking the biggest jump in cash since the debt ceiling crisis in 2011; allocation to cash jumps 10ppt from last month to net 43% overweight

Average cash balance holds steady at 5.1%, well above the 10-year average of 4.5%, as investors stay bearish. A record 85% of survey respondents think the global economy is in the late cycle, 11ppt above prior highs in Dec. ‘07

It has been a non-stop outflow trend from Europe lately. According to Bank of America Merrill Lynch, over the past 26 weeks almost $90bn has left European risk assets (IG, HY, Govies and equities)...

BofA Merrill Lynch Global Research highlights the importance of the peripheral trade (BTPs vs. Bunds) for the health of the credit market. Should peripheral spreads fail to rebound, BofA Merrill Lynch think that flows into credit will struggle going forward and so will returns.

According to Bank of America Merrill Lynch, it seems that outflows from Euro/European focused HY funds have stopped. Over the past 2wk Euro focussed European domiciled funds have recorded healthy inflows putting an end to weeks of poor flows.