Insights

Liquidity Fund Monthly

16 May 2023

CALM RETURNS TO MARKETS IN APRIL

As the concerns induced by bank-related jitters in March eased, investor appetite for risk improved. This was bolstered by a solid start to corporate earnings season and resilient economic data. Inflation remained well above central bank targets; headline rates are generally tracking lower on declining energy prices although core inflation has proved a bit stickier. Even as markets continued to price in policy rate hikes for May, there was a growing sense that the US Federal Reserve may pause thereafter while monetary policy in Europe may require more tightening before a terminal rate is reached.

Against this backdrop, there was some divergence in market rates between the US and Europe. While 10-year US Treasury yields dipped from 3.47% to 3.42%, similar-dated UK yields rose from 3.49% to 3.72%. Ten-year German yields ticked up modestly. Short-term cash rates generally moved higher to reflect expected policy tightening.

State Street EUR Liquidity LVNAV Fund

European Central Bank: In the absence of a meeting of the ECB’s Governing Council in April, policy rates were unchanged.

Market Rates: One-month EURIBOR rose to 3.05% from 2.92%, with the 3-month rate up to 3.27% from 3.04%. *

Macro: Headline inflation ticked up to 7.0% from 6.9% after a sharp fall in March. Core inflation (which excludes energy and food) edged off its record high to 5.6% in April.

ECB Deposit Facility Rate: 3.50%
1-month Fund Yield (Gross): 2.94%
1-month Fund Yield (Net): 2.79%**

Factsheet

State Street GBP Liquidity LVNAV Fund

Bank of England: The bank’s Monetary Policy Committee did not meet in April although markets priced in a rate hike for May.

Market Rates: The 1-month ICE Term SONIA rate rose from 4.17% to 4.34%, with the 12-month rate up from 4.58% to 4.81%.*

Macro: Annual CPI inflation remained in double digits, albeit while declining from 10.4% to 10.1% in March. The core rate was unchanged at 6.2%.

Bank Base Rate: 4.25%
1-month Fund Yield (Gross): 4.25%
1-month Fund Yield (Net): 4.05%**

Factsheet

State Street USD Liquidity LVNAV Fund

Federal Reserve: With no meeting of the Federal Open Market Committee, policy rates were thus unchanged.

Market Rates: Rates rose amid mixed views on when rate cuts might materialize. The 3-month Treasury Bill yield climbed from 4.81% to 5.06%, with the 12-month up to 4.77% from 4.69%.*

Macro: US headline annual CPI inflation fell to 5.0% in March from 6.0%. The core rate ticked up to 5.6% from 5.5%.

Fed Funds Target Rate: 4.75% - 5.00%
1-month Fund Yield (Gross): 5.12%
1-month Fund Yield (Net): 4.92%**

Factsheet

State Street USD Treasury Liquidity Fund

Federal Reserve: As April progressed, markets firmed up expectations for a rate hike of 25bps at the Fed’s May meeting.

Market Rates: Amid debt ceiling concerns, investor preference for short-dated securities helped drive the 1-month US Treasury Bill yield as low as 3.3% before ending April at 4.19% (down from 4.58% in the month). *

Macro: Core Personal Consumption Expenditures (PCE), the Fed’s preferred inflation measure, eased in March with the annual rate slowing from 4.7% to 4.6%.

Fed Funds Target Rate: 4.75% - 5.00%
1-month Fund Yield (Gross): 4.94%
1-month Fund Yield (Net): 4.74%**

Factsheet

Footnotes

Disclosure

Marketing Communication

FOR PROFESSIONAL CLIENT USE ONLY. Not for use with the public.

Belgium: State Street Global Advisors Belgium, Chaussée de La Hulpe 185, 1170 Brussels, Belgium. T: +32 2 663 2036. State Street Global Advisors Belgium is a branch office of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2.

Germany: State Street Global Advisors Europe Limited, Branch in Germany, Brienner Strasse 59, D-80333 Munich, Germany ("State Street Global Advisors Germany"). T +49 (0)89 55878 400. State Street Global Advisors Germany is a branch of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2. www.ssga.com

Ireland: State Street Global Advisors Europe Limited is 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. F: +353 (0)1 776 3300. Web: www.ssga.com .

Netherlands: State Street Global Advisors Netherlands, Apollo Building 7th floor, Herikerbergweg 29, 1101 CN Amsterdam, Netherlands. T: +31 20 7181 000. State Street Global Advisors Netherlands is a branch office of State Street Global Advisors Europe Limited, registered in Ireland with company number 49934, authorised and regulated by the Central Bank of Ireland, and whose registered office is at 78 Sir John Rogerson’s Quay, Dublin 2. www.ssga.com

United Kingdom: State Street Global Advisors Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No. 2509928. VAT No. 5776591 81. Registered office: 20 Churchill Place, Canary Wharf, London, E14 5HJ. T: 020 3395 6000. F: 020 3395 6350.

Switzerland: State Street Global Advisors AG, Beethovenstr. 19, CH-8027 Zurich. Registered with the Register of Commerce Zurich CHE-105.078.458. T: +41 (0)44 245 70 00. F: +41 (0)44 245 70 16.

For Investors in UK - Pooled Funds:
The Company has been registered for distribution in the UK pursuant to the UK’s temporary permissions regime under regulation 62 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019. The Company is directed at 'professional clients' in the UK (within the meaning of the rules of the Financial Services and Markets Act 2000) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description should not rely on this communication. Many of the protections provided by the UK regulatory system do not apply to the operation of the Company, and compensation will not be available under the UK Financial Services Compensation Scheme.

For Investors in Switzerland:
The collective investment scheme referred to herein is a collective investment scheme under Irish law. Prospective investors may obtain the current sales prospectus, the articles of incorporation, the simplified prospectuses as well as the latest annual and semi-annual report free of charge from the Swiss Representative and Paying agent, State Street Bank GmbH Munich, Zurich Branch, Beethovenstrasse 19, 8027 Zurich as well as from the main distributor in Switzerland, State Street Global Advisors AG, Beethovenstrasse 19, 8027 Zurich. Before investing please read the prospectus and the KID, copies of which can be obtained from the Swiss representative, or at www.SSGA.com or www.ssga.com.

Actively managed funds do not seek to replicate the performance of a specified index.

The fund is actively managed and may underperform its benchmarks. An investment in the fund is not appropriate for all investors and is not intended to be a complete investment program. Investing in the fund involves risks, including the risk that investors may receive little or no return on the investment or that investors may lose part or even all of the investment.

The views expressed in this material are the views of EMEA Portfolio Management Team through the period ended 10/04/2023 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

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4792501.14.1.EMEA.INST
Expiration Date: 31/05/2024

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