HFRI extends 1Q performance and high watermark with 6th consecutive monthly gain;
Quantitative, Trend Following Macro CTAs post strongest gain in 10 months
Hedge funds posted gains for the sixth consecutive month, as trend-following, quantitative Macro strategies successfully navigated the dramatic selloff in gold and other commodities, according to data released today by HFR, the established global leader in the indexation, analysis and research of the global hedge fund industry. The HFRI Fund Weighted Composite Index gained +0.7 percent for the month, with positive contributions from U.S. and Japanese equity exposure, tactical commodity exposure, and falling fixed income yields globally on Bank of Japan stimulus measures and bond purchases. Funds of Hedge Funds also posted a gain for the month, with the HFRI Fund of Funds Index gaining +1.1 percent. Read more
Notable events from the past trading week:
– The Spanish 10-year bond yield closed the week at 5.37 per cent.
– The Italian 10-year bond yield closed the week at 4.56 per cent.
– The Eurozone countries have reached an agreement on Banking Supervision. It is envisaged that the European Central Bank (ECB) will be operationally ready to fulfil this function by the 1st of March 2014. The ECB is expected to oversee directly 150-200 European banks from the outset. Read more
Gold, silver, soybeans and corn will remain among the most attractive commodities for investors in the upcoming year
According to Morgan Stanley, the platinum group of precious metals will continue to benefit from a positive outlook in 2013, though there are certain concerns toward base metals such as copper. Read more
Rosier times ahead of shipping stocks
The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry commodities, rose for a third straight session on Wednesday. A surge in Atlantic and Pacific activity boosted rates for larger vessels.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, rose 25 points or 3.59 percent to 722 points. Read more
NASDAQ Dubai members and market participants are hereby notified that the DFSA has granted approval of amendments to the NASDAQ Dubai Business Rules, Rulebook 1 (Equities) and Rulebook 2 (Derivatives, Exchange Traded Commodities, Debt Securities, Structured Products and Collective Investment Funds).
The DFSA approval of the amendments to the Rulebooks follows the public consultation period which concluded on Monday, 13 August 2012. Read more
The long-term fundamentals driving commodities demand – and by extension oil and gas and mining shares – remain undiminished, despite the many and serious threats to performance over the near term. Volatility will remain a key theme in commodities over the next few months and with robust demand having failed to prevent substantial sell-offs in oil and gas and mining shares, there will be plentiful opportunities to profit for investors who can accept higher levels of risk. Read more
Central bankers took center stage during the past week. Bank of England, European Central Bank, and People’s Bank of China all moved to provide monetary accommodation to their struggling economies. In the U.S. the Fed was on the sidelines, but weak manufacturing and payroll numbers added to the grim reality of a global slowdown. Financial markets, coming off a strong close to the second quarter, faded as economic uncertainity took hold. Read more
Expectations of lower inflation is expected to reduce commodities’ appeal in 2012. Two of 2011’s strongest performing assets, gold and oil, are unlikely to replicate these returns in 2012. While supported by very low real interest rates, gold is likely to be held back by the U.S. dollar’s strength; however, an aggressive quantitative easing programme could provide a catalyst for a considerable move higher. Controlled supply should limit crude oil’s potential decline, according to Bill O’Neill, Chief Investment Officer for Europe, Middle East and Africa (EMEA) at Merrill Lynch Wealth Management. Read more
Another wild ride in the markets and the “safe haven” Gold was very much included in the proceedings. There has been see‐saw action in all the major stock markets and sell‐off in commodities, whilst the US$ is strengthening. The only real change came towards the end of the week and that was down to the fact that the US was no longer simply pointing the finger at the Eurozone. There is also growing uncertainty about the state of the Chinese economy.
A soft landing with reduced growth rate would be fine but the signs are that a hard landing cannot anymore be excluded, and that could help push the major economies back into recession. The commodity markets have stabilized on lower levels towards the end of the week, but especially Platinum, Palladium could find themselves at the end of another bout of selling in the very near future.
Most veteran money managers still believe commodities will hold value and outperform in the long term, despite recent slump in gold and silver prices, along with oil and other natural resources.
Emerging markets continue to promise strong upward development. Growth in world’s nascent economies will create a bold new consumer class, whose desire for more and better will feed demand for raw materials, industrial and precious metals, along with food and water.
The Far East, China, India, Latin America, South America, Brazil, Argentina, Chile’s economies are growing, even with setbacks from time to time. More people are employed and better jobs provide them the necessary income to afford houses, cars and lifestyle accessories. Read more