It benefitted most hedge funds strategies. CTAs recouped part of their recent losses on
\nbonds. Global Macro funds\u2019 gains on bonds were partially offset by losses in their long USD
\ncrosses (which were reinforced in early March). Structurally long bias strategies captured a
\nfavorable beta contribution. Finally, continued compression of credit and deal spreads
\nsupported Credit and Merger strategies.<\/p>\n
Since then, several hawkish statements, in contradiction with the outright dovish FOMC,
\ntriggered a rebound in USD and a drag in most assets pegged to it.<\/p>\n
This reversal is actually emphasizing growing nervousness regarding the current [fragile]\nmarket equilibrium. Vanishing concerns about China and a dovish Fed were building blocks
\nof the rally (along with oil prices and improving US data). These fundamentals are well
\npriced in. Now, with technical factors gradually exhausting and a scarcity of near-term
\nmonetary and economic catalysts, the focus might be shifting back to the macro wildcards
\nstill on the table. There are many of them.<\/p>\n
In that context, hedge fund strategies rebuilt their exposures to risky assets but remain
\ncautiously positioned (the Lyxor median equity beta snapped from 7% back to 15%, but
\nremains below 23% long term average). We too are keeping a balanced exposure. We aim
\nto capture directionality through tactical styles. Besides, we would exploit the elevated
\nasset dispersion with relative-value approaches, focusing on the ones least correlated to
\nthe current themes.<\/p>\n","protected":false},"excerpt":{"rendered":"
A more dovish FOMC than expected on March 16 offered the equity rally another leg up.
\nThe Fed shaved off its growth and inflation forecasts and its median dot was revised two
\nnotches down. Bond yields weakened and the downward pressure on the dollar further
\nsupported oil prices and EM assets.<\/p>\n","protected":false},"author":1,"featured_media":50514,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1480],"tags":[1687,1655,1723,1690,1651,1662,2068,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/50516"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=50516"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/50516\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/50514"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=50516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=50516"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=50516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}