{"id":65096,"date":"2017-08-22T00:40:08","date_gmt":"2017-08-21T22:40:08","guid":{"rendered":"http:\/\/beta.next-finance.net\/news\/euro-appreciation-catches-global-macro-off-guard\/"},"modified":"2019-12-31T02:06:10","modified_gmt":"2019-12-31T01:06:10","slug":"euro-appreciation-catches-global-macro-off-guard","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/news\/euro-appreciation-catches-global-macro-off-guard\/","title":{"rendered":"Euro appreciation catches global macro off guard"},"content":{"rendered":"<p>This has far<br \/>\nreaching market implications. In particular, this has contributed to fuel the rally in emerging market assets,<br \/>\nboth equities and fixed income, as local currency appreciation (vs. the dollar) has disinflationary effects and<br \/>\nprovides ample room for monetary accommodation. Over the recent weeks, South Africa, Colombia, Brazil<br \/>\nand India cut policy rates, in some cases by a large magnitude.<\/p>\n<p><quote>Dollar weakness, which has accelerated since mid-July, has taken many Macro investors off guard. In<br \/>\nparticular, the rise of the Euro\/Dollar currency pair was a significant detractor from performance for Global<br \/>\nMacro managers.<\/quote><br \/>\n They assume, and continue to assume, that monetary policy divergence between the<br \/>\nU.S. and the Eurozone should lead to Euro weakness. <strong>Last week, the Lyxor Global Macro Index was down<br \/>\n-0.8% which has brought its year-to-date performance to -4.3%.<\/strong> However, there is one exception: EMfocused<br \/>\nmacro managers, which are poorly represented in Global Macro indices, delivered solid<br \/>\nperformances in July as they benefitted from the EM rally. Going forward, we believe that dollar<br \/>\ndepreciation has gone too far and maintain an overweight stance on Global Macro managers, a strategy<br \/>\nthat we had upgraded a month ago.<\/p>\n<p><strong>On a positive note, CTAs outperformed last week.<\/strong> They dramatically adjusted their positioning in the foreign<br \/>\nexchange market over the recent months, and the asset class is now contributing positively to gains. Trend<br \/>\nfollowers actually reversed their short EUR\/USD positions over the course of May and are now long EUR.<\/p>\n<p><strong>In parallel, long positioning on equities also added to CTA gains.<\/strong><br \/>\nFinally the remaining hedge fund strategies were flat to slightly negative last week. Event-Driven and Fixed<br \/>\nIncome Arbitrage strategies took a pause after having delivered solid performances in the first half.<\/p>\n<p><a href=\"http:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2017\/08\/ctas_have_closely_tracked_the_rise_of_the_euro_in_opposition_to_macro_funds.jpg\"><img loading=\"lazy\" class=\" aligncenter size-full wp-image-65090\" src=\"IMG\/jpg\/ctas_have_closely_tracked_the_rise_of_the_euro_in_opposition_to_macro_funds.jpg\" alt=\"ctas_have_closely_tracked_the_rise_of_the_euro_in_opposition_to_macro_funds.jpg\" align=\"center\" width=\"816\" height=\"243\" \/><\/a><div id='gallery-1' class='gallery galleryid-65096 gallery-columns-3 gallery-size-herald-lay-c1'><figure class='gallery-item'>\n\t\t\t<div class='gallery-icon landscape'>\n\t\t\t\t<a class=\"herald-popup\" href='http:\/\/beta.next-finance.net\/wp-content\/uploads\/2017\/08\/ctas_have_closely_tracked_the_rise_of_the_euro_in_opposition_to_macro_funds.jpg'><img width=\"470\" height=\"243\" src=\"http:\/\/beta.next-finance.net\/wp-content\/uploads\/2017\/08\/ctas_have_closely_tracked_the_rise_of_the_euro_in_opposition_to_macro_funds-470x243.jpg\" class=\"attachment-herald-lay-c1 size-herald-lay-c1\" alt=\"\" loading=\"lazy\" \/><\/a>\n\t\t\t<\/div><\/figure>\n\t\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>The dollar continued to depreciate against major currencies over the recent weeks, in a context where the<br \/>\nU.S. administration has struggled to gain reform momentum in the health care and fiscal areas. <\/p>\n","protected":false},"author":1,"featured_media":65090,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1470],"tags":[1687,1743,1655,1658,1723,1690,1651,2214,1662,1672],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/65096"}],"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=65096"}],"version-history":[{"count":1,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/65096\/revisions"}],"predecessor-version":[{"id":65097,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/65096\/revisions\/65097"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/65090"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=65096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=65096"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=65096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}