Investors brush aside Russia concerns to pile into risk assets: BAML

Investors brushed aside concern over military and economic tensions between the United States and Russia to pump as much as $7 billion into equities over the past week, Bank of America Merrill Lynch strategists said on Friday. This included $2.8 billion of inflows into emerging market equities, according to the BAML note, which cited EPFR data.
While Russian assets have tanked this week after the US announced a fresh set of sanctions on Russian companies and individuals, there has been no sign of contagion in the emerging markets sector, according to the strategists. The sell-off in Russian, Turkish and Iranian assets has so far been offset by resilient Chinese currency flows, they said.
This means there was $2.8 billion of inflows into emerging markets equities and smaller inflows of $600 million into EM debt. "Weak US dollar means gold fund inflows and emerging market resilience," the BAML strategists said. The greenback has fallen 1 percent against the Japanese yen this week, and is down over 5 percent so far this year.
Overall investors have now pumped $119 billion into equities this year so far, while the bond inflows bring the year-to-date number to $54 billion. However, there have been some signs of caution in other areas. Inflows of $3.4 billion into US Treasuries this week mean money is flowing into US government bonds at a record pace of $18.6 billion year-to-date.