Insights

Global markets powered higher in November, with speculation for rate cuts by the major central banks next year serving as jet fuel for riskier assets. This was a fertile environment for the British pound, which outperformed its FX counterparts thanks to its close links with risk sentiment.

The euro also enjoyed some upside, despite a streak of disappointing data releases from the Eurozone.Most of the euro’s gains reflected a weaker US dollar. With inflation cooling, traders ramped up bets that the Fed will slash interest rates sooner and deeper next year, inflicting serious damage on the world’s reserve currency.

Gold performed exceptionally well in these conditions, rising by more than 2.5% on the month to come within striking distance of its record highs. The latter allowed the Fund’s Gold strategy to capitalise gains on the instrument’s price movement throughout the month, while our Yen strategies lost ground.

The subdued tone by the Bank of Japan regarding its interest rates, caused the currency to hover around its previous levels, minimising the opportunity to profit while adding execution costs. Nevertheless, the net effect was positive for the Fund’s return in November.