Nov. 2016 || Newsletter

Investment Perspective
October proved to be a relatively quiet month for equity markets with the MSCI World Index declining by 0.8%. Weaker currencies contributed to the outperformance of European and Japanese equities over US ones during a period of widespread dollar strength. However, the main trend observed during the past month was the pick-up of bond yields, resulting in above-average price movements for the asset class. Highly-rated sovereign debt and credit were the most impacted fixed-income market segments, reflected by the 1.7% drop of the Citigroup Euro Broad Investment Grade Index. Investors appear to be taking account of the fact that the main central banks have reached the limits of their unprecedented policy actions and that record low yield levels are no longer sustainable.    

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Oct. 2016 || Newsletter

Investment Perspective
During a month where global equities ended largely unchanged, the policies of Central Banks continued to be the main drivers of the markets’ behaviour in September. Following a positive start to the month, equities retreated after ECB President Mario Draghi disappointed investors by keeping the bank’s policy unchanged and by not committing to more stimulus once the current QE program expires in March 2017. Draghi gave the impression that the ECB had largely fulfilled its mandate as he urged governments to help out with looser tax and spending policy and economic reforms. Stocks were also hurt by the weakness of the European banking sector following the news that the U.S. Justice Department was claiming $14 billion from Deutsche Bank to settle a probe related to the subprime mortgage crisis in 2008.

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Sept. 2016 || Newsletter

Investment Perspective
The main trends observed during a quiet month of August were the extension of the tightening of credit and emerging market debt spreads, the strong rebound of oil prices and for developed markets’ equities to remain range bound; the equities of emerging markets also continued to outperform on the back of positive inflows. In contrast, the US dollar proved to be quite volatile. Following a weak start to the month, the dollar rallied as expectations of higher US interest rates were boosted by comments from Fed Chair Janet Yellen and Vice Chairman Stanley Fischer at the end of the month.

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June 2016 || Newsletter

Investment Perspective
The month of May was proving to be quite uneventful as major equity markets evolved in a trendless manner within tight ranges. However, at month-end, they were shaken out of their lethargy by the realization that the Federal Reserve could well raise interest rates as early as June. This contributed to a positive end to the month for global equity markets and to additional gains for the dollar, while gold continued to slide and Treasury yields moved higher. The developed equity markets registered modest monthly gains while the prospect of higher US interest rates hurt the assets of emerging markets.

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May 2016 || Newsletter

Investment Perspective
Equity indexes gave up most of their April gains during the month’s last trading sessions after the Bank of Japan shocked the markets by not adding to its monetary stimulus; the Nikkei 225 Index plunged by 3.6% in the wake of this decision while the EuroStoxx 50 Index lost 3.1% the day after. Currency volatility remained at elevated levels with the yen recording its biggest weekly gain against the dollar since 2008 and the Dollar Index falling for a third consecutive month. In contrast, commodity prices recorded significant gains.

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April 2016 || Newsletter

Investment Perspective
During March, global equity markets continued to claw back early-year losses with the MSCI World Local Index climbing by 5% thus limiting its first quarter loss to 2.5%. With a 13% monthly gain, emerging market equities outperformed significantly on the back of improving sentiment, a rebound of commodity prices and dollar weakness. The dollar effectively had one of its worst quarters in more than five years, reflected by the 3.7% drop of the Dollar Index.

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March 2016 || Newsletter

Investment Perspective
Global equity markets fell for a third month but ended well above the mid-February lows. Market sentiment gradually improved on signs that financial tensions in China were abating and on better price trends for commodities. This was best illustrated by the 29% rebound of oil prices from February 11 onwards, following the severe decline observed since the start of the year. Nevertheless, assets deemed the safest performed the best and included German bunds, whose 10-year yield collapsed to 11bps, as well as gold which appreciated by 11% to reach $1’239 an ounce.

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February 2016 || Newsletter

Investment Perspective
Global financial markets were under considerable stress all through January as market sentiment was negatively impacted by the selling pressure on Chinese assets and the sharp drop of oil prices. The correction of equity markets was widespread while risky credit instruments suffered from the significant widening of their spreads. Under these conditions, the best performing assets unsurprisingly included government bonds of the developed markets, gold and the Japanese yen until the Bank of Japan unexpectedly announced the introduction of negative interest rates.

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