• Sterling vs USD lowest since 1985, whilst UK equities reach record highs
• US economy adds 156,000 jobs in September
• Dollar rises as expectations converge on December rate hike
• ECB rumours trigger rise in global bond yields
• In commodities, oil rises and gold falls
September was again dominated by will-they/won’t they speculation around the US Federal Reserve raising rates at their meeting during the month, although fears over Deutsche Bank’s viability and an OPEC agreed production cut were also significant events.
Meanwhile, PortfolioMetrix’s model portfolios’ relative performance was again strong over the month, with the 10 balanced funds they regularly track up on average 0.3% over the month with the highest performing up 1.0% and the weakest down 0.5%.
Overall, Core Active 6 outperformed 9 of these 10 competitors.
May was a month of decoupling: oil decoupled from the dollar, and global risk decoupled from the once again sharply devaluing Yuan, but most notably May was a month where Fed rate hike expectations repriced midway through the month.
As Deutsche Bank’s Managing Director, Global Head of the Fundamental Credit Strategy Group, and Strategist, Jim Reid points out, markets largely took the move in their stride and reversed a difficult start to the month. Having said that we saw evidence of the repricing with dollar strength and Emerging Markets/Gold weakness a theme.
Crude oil prices “appear to have reached their peak for now,” warns Ole Hansen, Head of Commodity Strategy, Saxo Bank. (Click on the video below).
