At the end of last week, the prospect of a breakthrough in trade talks between the United States and China brought some colour back to the market, but in the week ending on 16 January, invetors preferred bonds. According to weekly statistics from Bank of America Merrill Lynch Global Research, bond funds attracted USD2.8bn, while equity funds saw net outflows of USD4.8bn. Investment grade (IG) bond funds posted outflows of USD1.3bn, but high yield bond funds saw net inflows of USD2.8bn, the highest since April 2017. Emerging market debt funds remain in investors’ good boods, with positive net inflows of USD2.5bn, the largest of the past 12 months, according to the weekly survey, based on figures from the global flow evolution monitoring specialist EPFR Global. In equities, the situation in Europe remains edgy due to uncertainties surrounding Brexit and a rising wave of populism, and the outlooks on emerging markets, viewed as favourable by many managers, largely due to their anticipation of a weak US dollar, have suffered the same fate. European equity funds have seen further net outflows of USD0.8bn, while funds specialised in emerging market equities brought in USD3.4bn, for a 14th consecutive week of positive net inflows. However, US equity funds saw substantial outflows of USD7.7bn.