Global Risk Aversion and Strengthening Pattern of Weaker Stocks and Stronger Bonds; Eurozone Inflation Falls and Economic Sentiment Improves; Demographic Cycle Boosts Fertility Rate Recovery in South Korea --- 0706 Macro Overview
- Global capital flows show a clear risk-aversion trend: equity funds saw net outflows for two consecutive weeks, expanding to $13.97 billion, while net inflows into bond funds surged to $28.95 billion. The defensive stance was most pronounced in the U.S. market, with U.S. equities experiencing increased outflows of $14.07 billion and U.S. bonds seeing inflows of $22.64 billion. European equities weakened, while Japan maintained simultaneous inflows into both equities and bonds.
- The eurozone’s overall CPI for June unexpectedly fell to 2.8%, with core CPI dropping to 2.4%. The economic sentiment index rebounded to 95.0 but remained below its long-term average. Declining employment expectations indicate continued corporate caution. Christine Lagarde stated that economic resilience has strengthened, June’s rate hike was not preemptive, and the future interest rate path will depend entirely on economic data assessment.
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In South Korea, new births in April increased 18% year-on-year, and the total fertility rate rebounded to 0.93. The boom in AI company earnings and the wealth effect of the stock market are not the main reasons; the population cycle is the key driver. However, the decline in the younger population continues to be a constraint, with active government subsidies and the recovery of consumer confidence providing auxiliary support.
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