Insights

Liquidity Fund Monthly

15 September 2023

MIXED DATA WEIGHS ON MARKET SENTIMENT

There was a retreat in risk appetite during August as financial markets weighed the uncertain macro landscape against the prospects for easier interest rate policies. Resilient US jobs and retail sales data raised the potential of a soft economic landing, but it also invoked the prospect of rates staying high for even longer. While European labour markets remained tight as well, the broad thrust of economic data was less robust than in the US. With headline eurozone inflation unchanged at 5.3% (Source: Eurostat as of 31 August 2023), the European Central Bank is expected to increase rates further, stoking concerns the economic slowdown could become a recession. Also keeping markets on edge was weaker-than-expected data from China – the world’s second-biggest economy – where weak confidence levels and a struggling real estate sector offset moves by the People’s Bank of China to ease policy rates.

In rates markets, longer-dated bond yields were generally flat in Europe and higher in the US. Shorter-dated cash rates tended to track higher against the backdrop of ambiguity around near-term moves by central banks.

State Street EUR Liquidity LVNAV Fund

European Central Bank: : With no meeting of the ECB Governing Council in August, policy rates were unchanged.

Market Rates : One-month EURIBOR rose to 3.64% from 3.58%, with the 12-month rate up to 4.10% from 4.06%. *

Macro: Headline annual inflation was static at 5.3% in August, with the core rate dropping to the same level from 5.5%.

ECB Deposit Facility Rate: 3.75%
1-month Fund Yield (Gross): 3.70%
1-month Fund Yield (Net): 3.55%**

Factsheet

State Street GBP Liquidity LVNAV Fund

Bank of England: In a split vote, the Monetary Policy Committee agreed to raise rates by a quarter percentage point.

Market Rates: The 1-month ICE Term SONIA rate ticked up to 5.26% from 5.24%, with the 12-month rate dipping to 5.79% from 5.83%. *

Macro: Annual CPI inflation fell from 7.9% to 6.8% in July, although the core rate was unchanged at 6.9%.

Bank Base Rate: 5.25%
1-month Fund Yield (Gross): 5.17%
1-month Fund Yield (Net): 4.97%**

Factsheet

State Street USD Liquidity LVNAV Fund

Federal Reserve: The Federal Open Market Committee did not meet in August, with policy rates thus remaining unchanged.

Market Rates: The 3-month US Treasury Bill yield edged up from 5.42% to 5.46%. The 12-month yield rose to 5.40% from 5.38%. *

Macro: US headline annual CPI inflation picked up to 3.2% in July from 3.0%. The core rate fell to 4.7%, the lowest level since October 2021.

Fed Funds Target Rate: 5.25% - 5.50%
1-month Fund Yield (Gross): 5.59%
1-month Fund Yield (Net): 5.39%**

Factsheet

State Street USD Treasury Liquidity Fund

Federal Reserve: In the absence of a FOMC meeting, focus moved to the Fed’s Jackson Hole gathering where Jerome Powell delivered a less hawkish speech that initially expected.

Market Rates: Yields on short-dated securities changed modestly over the month – the 1-month US Treasury Bill yield ticked higher to 5.39% from 5.38% in August. *

Macro: Core Personal Consumption Expenditures (PCE), the Fed’s preferred inflation measure, rose from 4.1% to 4.2% in July.

Fed Funds Target Rate: 5.25% - 5.50%
1-month Fund Yield (Gross): 5.47%
1-month Fund Yield (Net): 5.27%**

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.

Currency Risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

The views expressed in this material are the views of EMEA Portfolio Management Team through the period ended 31 August 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.

Investing involves risk including the risk of loss of principal.

Past performance is not a reliable indicator of future performance.

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The above targets are estimates based on certain assumptions and analysis. There is no guarantee that the estimates will be achieved.

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.

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These investments may have difficulty in liquidating an investment position without taking a significant discount from current market value, which can be a significant problem with certain lightly traded securities.

Please refer to the Fund’s latest Key Information Document (KID)/Key Investor Information Document (KIID) and Prospectus before making any final investment decision. The latest English version of the prospectus and the KID/KIID 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

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Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

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