Insights

A wave of optimism swept through global markets in February, with several asset classes enjoying a burst of demand from investors as incoming data painted a picture of a resilient US economy.

This economic outperformance helped the dollar regain some momentum, as traders were forced to unwind bets of imminent Fed rate cuts. With the timing of rate cuts being pushed into the future, bond yields across the world started to creep higher again, which in turn inflicted heavy damage on the Japanese yen.

Finally, gold prices managed to eke out a minor gain during the month, even despite the appreciation of the dollar and the recovery in real yields, which are usually negative developments for bullion. Gold was flying against the wind, making its slight advance through choppy price movements which had an overall adverse effect on the IXI Grow strategy.

This sharp, mean reverting behaviour of gold pricing and the absence of volatility in the FX traded instruments, were the two main reasons for February’s negative performance. On a brighter side, March started with robust directional price movements allowing the strategy to recover last month’s losses by delivering strong performance at the beginning of the month.