Skip to main content
    More Results

    From Sectors and Smart Beta to Fixed Income, SPDR Exchange Traded Funds (ETFs) give you wide access to diverse investment opportunities. Find out more.

    Okay
    Insights

    Liquidity Fund Monthly

    MIXED SIGNALS UNSETTLE MARKETS

    As February progressed investor sentiment appeared to shift from believing that an end the rate hike cycle was nigh to recognition that the economic conditions may not yet be supportive of that view. Stronger-than-expected data on the jobs, inflation, and business activity fronts prompted investors to revisit previous assessments about recession prospects. Market speculation about hard or soft landings was expanded to include the potential for a ‘no landing’ scenario.

    Central banks in the US and Europe increased interest rates in line with expectations and flagged that the fight against persistent inflation would continue. Bonds weakened across the spectrum, but particularly for shorter maturity assets — the inversion of the US Treasury yield curve (in the 2Y/10Y area) was the steepest since 1981 as the yield gap widened to 90 basis points. European bonds also retreated in the month. Short-dated market rates increased on policy rate hikes and the likelihood of higher rates for longer; upward moves in 12-month rates typically reversed the declines of the previous month.

    Related Insights

    State Street EUR Liquidity LVNAV Fund

    European Central Bank: No surprises in the month as the Governing Council voted to raise policy rates by 50 basis points.

    Market Rates: One-month EURIBOR rose to 2.48% from 2.18%, with the three-month rate up to 2.74% from 2.51%. *

    Macro: Inflation edged lower from 8.6% to 8.5% in February, although core inflation (which excludes energy and food) rose to a new high of 5.6%.

    ECB Deposit Facility Rate: 2.50%
    1-month Fund Yield (Gross): 2.22%
    1-month Fund Yield (Net): 2.07%**

    Factsheet

    State Street GBP Liquidity LVNAV Fund

    Bank of England: The Monetary Policy Committee increased policy rates 50bps to 4.0%, while indicating that rates may be near their peak.

    Market Rates: The 1-month ICE Term SONIA rate rose from 3.85% to 3.99%, with the 12-month rate up 36bps to 4.68%.*

    Macro: Annual CPI inflation fell more than expected to 10.1%, with the core rate dipping to a seven-month low of 5.8%.

    Bank Base Rate: 4.00%
    1-month Fund Yield (Gross): 3.93%
    1-month Fund Yield (Net): 3.73%**

    Factsheet

    State Street USD Liquidity LVNAV Fund

    Federal Reserve: As expected, the Fed slowed the pace of rate hikes with its smallest increase (25bps) since March 2022.

    Market Rates: USD market rates increased amid ongoing inflation concerns. 3-month LIBOR rose to 4.97% from 4.81%, with the 12-month rate up to 5.68% from 5.34%. *

    Macro: US headline annual CPI inflation fell to 6.4% in January from 6.5%. The smaller-than-expected decline was replicated in the core rate, which also fell 0.1% to 5.6%.

    Fed Funds Target Rate: 4.50% - 4.75%
    1-month Fund Yield (Gross): 4.85%
    1-month Fund Yield (Net): 4.65%**

    Factsheet

    State Street USD Treasury Liquidity Fund

    Federal Reserve: The Fed warned the disinflation process has a long way to go, contrasting with more dovish comments earlier in the month.

    Market Rates: The 1-month US Treasury Bill yield rose to 4.60% from 4.53% in February. *

    Macro: Core Personal Consumption Expenditures (PCE), the Fed’s preferred inflation measure, unexpectedly increased to 4.7% in January from 4.4%.

    Fed Funds Target Rate: 4.50% - 4.75%
    1-month Fund Yield (Gross): 4.67%
    1-month Fund Yield (Net): 4.47%**

    Factsheet

    More on Cash

    MARKETING COMMUNICATION

     

    FOR PROFESSIONAL INVESTORS USE ONLY.

     

    Investing involves risk including the risk of loss of principal.

     

    The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor.

     

    The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.

     

    All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.  There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

     

    This content has been issued by State Street Global Advisors Europe Limited (“SSGAEL”), regulated by the Central Bank of Ireland. Registered office address 78 Sir John Rogerson’s Quay, Dublin 2. Registered number 49934. T: +353 (0)1 776 3000. Fax: +353 (0)1 776 3300.

     

    Please refer to the Fund’s latest Key Information Document (KID) and Prospectus before making any final investment decision. The latest English version of the prospectus and the KID can be found at www.ssga.com. A summary of investor rights can be found here:

     

    https://www.ssga.com/library-content/products/fund-docs/summary-of-investor-rights/ssga-investors-rights-summary-template-non-etf-Lux.pdf

     

    Note that the Management Company may decide to terminate the arrangements made for marketing and proceed with de-notification in compliance with Article 93a of Directive 2009/65/EC.

     

    The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

     

    5077518.1.3.EMEA.INST

    Exp. 31.01.2024

    © [[]] %%State Street Corporation%%. All rights reserved.