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Weekly ETF Monitor for week ending 9 February 2018

Global stocks again suffered heavily in a volatile week, with the S&P 500 and NASDAQ 100 both recording losses over 5% despite a late recovery in Friday's session. The S&P 500 stumble, which at one point fell 12% from the latest highs, recorded its steepest slide since January 2016. No sector was spared in the rout but financials and I.T. detracted most. The S&P/ASX 200 fell 4.6% while, in Europe, the EURO STOXX 50 fell 5.6%, hitting 12-month lows. Emerging Markets did not fare much better, down 7.2%.

In the U.S., lawmakers agreed to a budget deal and an increase in the debt ceiling. The USD was mixed against the G10 in volatile trading. GBP underperformed with negative Brexit headlines and the AUD ended the week at US78c. With heightened inflation fears being cited as one of the catalysts for the recent market selloff, this week’s U.S. CPI data (released Wednesday) is likely to be a focus for markets.

Commodities including oil, gold and industrial metals moved lower Friday. Oil was down over 9% for the week ending at US$59/bbl its lowest level in six weeks as concerns mounted about increasing production levels. Gold fell 1.3% to 1,317 (US$/troy ounce). BetaShares Australian Equities Strong Bear (BBOZ) was the top performing fund for the week, posting a 13.4% gain, while the BetaShares Geared US Equity Fund - Ccy Hedged (GGUS) lost 13.3%.

The domestic Australian ETF market again saw positive net inflows last week of $39.1m. The largest inflows were into SPDR S&P/ASX 200 Fund (STW) and into the VanEck Vectors Australian equal Weight ETF (MVW) while the largest outflow was seen in BetaShares Australian High Interest Cash ETF (AAA).