The HFS Bulletin for September 2024 outlines various indices used for illustrative purposes, emphasizing that they are unmanaged and not directly investable. Key indices include the Barclays Corporate High Yield Index, which excludes certain bonds, and the Barclays Global Aggregate Index, representing global investment-grade fixed income markets. Other notable indices cover diverse strategies such as equity hedging, event-driven investing, and macroeconomic trends, providing benchmarks for hedge fund performance across multiple asset classes.
The International Monetary Fund has raised its 2024 growth forecast for the UK to 1.1%, up from 0.7%, citing lower inflation and interest rates as key factors boosting domestic demand. Inflation fell to 1.7% in September, down from 11.1% a year prior, prompting expectations of quicker interest rate cuts by the Bank of England. As the Labour Party prepares to unveil its first budget in 14 years, Prime Minister Keir Starmer warns of "tough" decisions to address a claimed £22 billion financing shortfall.
The IMF reports that the global fight against inflation is nearly complete, with a projected decline to 3.5% by the end of 2025, down from 5.8% in 2024. However, rising geopolitical risks, market volatility, and weaker long-term growth prospects pose significant challenges, particularly for lower-income countries. The IMF warns that while inflation expectations remain stable, vigilance is essential as financial market turbulence and geopolitical tensions could threaten economic stability.
Norway's sovereign wealth fund reported a third-quarter profit of 835 billion kroner ($76.3 billion), driven by a stock market surge due to falling interest rates. The fund's value reached 18.870 trillion kroner, with a 4.4% overall return, slightly below its benchmark. Despite positive returns across investment areas, heightened global risks were noted amid a shifting geopolitical landscape.
UBS faces a dilemma as U.S. investment banking thrives, with American banks reporting record profits while UBS maintains a cautious approach to high-risk deals. Although UBS excels in wealth management across Asia and Europe, it earns less from investment banking compared to its U.S. counterparts. The booming sector may reignite discussions on UBS's investment banking strategy, especially following its acquisition of Credit Suisse, which has brought new expertise to the firm.
Yen selling against the dollar is expected to increase as North American traders begin their sessions, highlighting significant short-selling activity. With US Treasuries under pressure and Federal Reserve officials urging caution on rate cuts, the yen faces further declines, targeting its 200-day moving average at 151.36.
Bonds are experiencing a selloff globally as traders reassess expectations for US interest-rate cuts. Yields on Australian 10-year notes surged by up to 10 basis points, while New Zealand's and Japan's 10-year yields also rose, reaching near two-month highs. This trend poses risks to debt positions worldwide.
Tokyo Metro Co. made its trading debut, marking the largest listing in Japan in six years, raising ¥348.6 billion ($2.3 billion). The IPO attracted investors due to the company's reputation for safety and reliability, serving as a key indicator of market appetite ahead of a significant election that could influence interest rate expectations.
The UK will loan Ukraine £2.3 billion ($3 billion) for military equipment, funded by profits from frozen Russian assets. This initiative is part of a broader $50 billion support package from the Group of Seven nations and the European Union, with the UK detailing its contribution for the first time.
EUR/USD remains under pressure, having fallen below the 200-day SMA after a brief rally. In contrast, GBP/USD shows signs of recovery, forming a higher low, while USD/JPY stalls below ¥150.00, with potential for short-term weakness unless it closes above this level.
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