![\"-384.jpg\"](\"https:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2019\/07\/384.jpg\")
<\/a>Global Macro strategies are up +5.3% year-to-date according to the Lyxor Global Macro Peer group, which pools
\ntogether 40 UCITS strategies. A significant part of such performance has been delivered by Emerging Markets
\n(\u201cEM\u201d) strategies (+6.9%), while Discretionary and Systematic ones lagged (+4.6% and +3.5% respectively). This
\nwas hopefully in line with our expectations. Our stance on EM-Macro has been Overweight for several months,
\nwhile were more defensive on Discretionary (at Neutral) and Systematic strategies (at Underweight).<\/p>\n
The factors behind EM-Macro returns are quite immediate. We explain the bulk of their returns over the past 12
\nmonths with two variables: an EM Currency Index and an EM Hard Currency Sovereign Bond Index. Concurrently,
\nDiscretionary managers\u2019 returns during the same period can be partly explained by: i) curve flattening trades in the
\n2-10y segment in the U.S., ii) buying positions on EM assets (FX, bonds, equities), and iii) selling positions on FX
\ncarry and long-dated Treasuries (30 year). However, it is trickier to explain the returns of Systematic strategies.<\/p>\n
Despite our efforts, we manage to explain only 30% of their recent returns with five variables: i) buying positions
\non global developed equities and long-dated Treasuries, ii) selling positions on the momentum equity risk factor
\nand FX carry and, iii) positions which benefit from a tightening of EM sovereign spreads.<\/p>\n
Going forward, we upgrade our stance on Global Macro strategies from Underweight to Neutral. We particularly
\nupgrade Systematic Macro strategies to Neutral on the back of the Fed managing to lift growth expectations. We
\nbelieve the Fed has both the room and the willingness to act and push forward our expectation for the first rate cut
\nto the end-July FOMC meeting. Meanwhile our stance on EM sovereign bonds stays constructive and we upgraded
\nU.S. equities to Overweight. Our scenario assumes that the trade truce will be extended since the U.S.
\nadministration is cornered by the presidential election next year. Trade uncertainty has caused a growth
\ndeceleration. Further escalation could dip the U.S. economy into a recession.<\/p>\n