J.P. Morgan Asset Management published a "Global Liquidity Mid-Year Outlook 2026, EMEA" titled "Cash at the Crossroads: Navigating Rates, Energy and AI." Written by London-based Neil Hutchison and Joseph McConnell, it says, "For cash investors, the key feature of the first half of 2026 has been a disconnect: risk assets have remained resilient, while rates markets have repriced and reset higher. The shift away from 'cuts are coming' towards 'higher for longer' is a positive backdrop for liquidity investors: today's higher yields can be attractive in cash and short duration assets, and higher volatility can create more opportunities to add value." (Note: Please join us for our next event, "European Money Fund Symposium," which will take place Sept. 24-25 in Paris, France.)
The brief tells us, "The ECB's June projections tell the story: modest growth, inflation above target into 2027 and sticky core inflation. Therefore, June's [Euro rate] hike to 2.25% was unanimous and deliberate. However, while President Lagarde's tone was hawkish, she resisted pre-commitment. We expect one further 25bps hike in September; beyond that, the same scenario discipline that justified June's move limits what comes next. Over tightening now raises the probability of reversal in 2027."
The post states, "Credit spreads are tight, but we think they can stay there. Reduced tail risks, resilient earnings and AI driven sentiment argue against sustained widening, though summer volatility is likely. Front end euro yields are at multi year highs, offering genuine curve carry. We remain constructive on financials. Higher yields, more volatility and a steeper curve can support bank fundamentals, which is why financials remain a core part of our opportunity set and a preferred vehicle for credit beta. In a wider range of outcomes, active risk management matters more, not only in credit selection, but also in liquidity, duration and the agility to respond to headline driven repricing."
JPMAM adds, "The ECB looks close to the end of its mini-tightening cycle; meanwhile the BoE remains patient as it assesses the risk of second-round effects. H2 2026 hinges on whether lower energy prices persist and whether inflation stays contained rather than broadening into wages and services. Geopolitics, via energy security and volatility, remains the key swing factor, and Europe is more exposed, even if spillovers are global. In this environment, we believe cash and short duration assets offer real value, and disciplined active management across credit, liquidity and duration has rarely mattered more."
In other European money fund news, a news brief titled, "Coinbase and Spiko Unlock 24/7 Stablecoin Access to Europe's Regulated UCITS Funds," explains, "Coinbase announced that its payment infrastructure now powers stablecoin funding for Spiko's EU and U.S. Treasury Bills Money Market Funds. The integration allows investors to enter and exit regulated UCITS funds using USDC and EURC almost instantly instead of relying on conventional banking rails. Transactions are processed through Coinbase Payments and settled on Base, Coinbase's Ethereum Layer-2 network, enabling round-the-clock capital movement, including weekends and public holidays."
Another article, "Amundi launches tokenised money market fund for Ant International Fintech Global," states, "The centrepiece of the initiative is Amundi's launch of tokenised share classes for the Amundi Money Market Fund – Short Term, denominated in euros and US dollars. These share classes were developed specifically for Ant International following a memorandum of understanding signed in November of last year, which committed the two firms to exploring blockchain applications for real-time treasury management and tokenised investment solutions."
It says, "As the inaugural customer of the collaboration, Ant International worked alongside Amundi to build a real-time investment solution tailored to its intra-group liquidity management requirements. CACEIS served in a dual capacity as both transfer agent and tokenisation agent, with the three-way arrangement designed to enhance the operational efficiency and on-chain treasury capabilities of Ant International. The trio is now looking beyond this initial milestone. The parties are exploring the potential launch of the Amundi Money Market Fund – Short Term on Whale, Ant International's proprietary blockchain-based treasury management platform."
The piece quotes Amundi's Fannie Wurtz, "We are delighted to support Ant International in this pioneering project and to further advance the real-world applications of tokenisation in investment solutions. This collaboration brings together leading institutions committed to innovation and to seizing opportunities emerging in the digital asset space. It also reflects Amundi's dedication to meeting the evolving needs of sophisticated clients and our ambition to shaping the future of finance."
Finally, a press release from Luxembourg's regulator, "CSSF consults on Guidance on Money Market Fund Liquid Asset Levels," states, "On 15 May 2026 the CSSF informed about a report (the '2026 MMF report') published by the European Commission (the 'EC') to the European Parliament and the Council on the adequacy of the Money Market Funds Regulation (MMFR) from a prudential and economic point of view and related frequently asked questions (FAQs) on the interpretation and implementation of certain legal provisions of the MMFR."
It continues, "In its communication, the EC informed that the EU's regulatory framework for money market funds (MMFs) continues to function well overall and mentioned that the market would benefit from additional guidance to support more consistent and well-calibrated supervision of MMFs across the EU, strengthening the resilience of the sector. In this context, the EC identified a 'market resilience' level of Weekly Liquid Assets (WLA). From a market-wide perspective, the 2026 MMF report indicates that these WLA levels would enable EU authorised MMFs to withstand future market stress events based on historical data and to mitigate against the potential transmission of shocks to the rest of the financial system and the real economy."
The statement comments, "Following the 2026 MMF report and in close coordination with the EC, the French AMF, the Central Bank of Ireland and the CSSF are consulting on national guidance for enhanced MMF liquidity risk management practices based on the Commission-suggested market resilience levels, supported by increased supervisory scrutiny and engagement where MMFs fall below the market resilience levels of liquidity."
It adds, "The objective of this communication is to inform market participants about the consultation paper 'Guidance on Money Market Fund Weekly Liquid Asset Levels,' whose purpose is to set out details of the proposed guidance and to seek feedback from stakeholders on the proposals. The consultation paper contains more particularly the following: the guidance on Money Market Fund WLA levels; and the questions addressed to the industry on the proposed guidance. The CSSF invites all stakeholders to provide responses to the consultation questions on the proposed guidance. These responses should be submitted electronically by email to opc_prud_risk@cssf.lu no later than 3 August 2026." (See "Guidance on Money Market Fund Weekly Liquid Asset Levels" here.")
