| Instruments traded | FX spot |
| Asset classes | FX |
| Investment style | Discretionary (non-systematic), macro analysis |
| 2021 return | 3.09%* |
Annualised volatility
| 21% |
Average trades per week
| 1.3 |
* (net of trading costs, service fee and performance fee - considering a performance fee for investing since inception but, since your performance fee will depend on your point of entry, your net returns will vary too).
Market overview
During the last quarter of 2021, the bulk of gains during October and November are attributed to the major pairs, EUR/USD, USD/JPY AND GBP/USD and supported by active trading in the commodity currencies CAD and AUD.
The extreme volatility in gas and electricity markets carried over from Q3 and was joined by Short Term Interest Rates markets in mid-October as hawkish comments from Bank of England Governor spiked expectations for a November rate hike.
During the last weeks of Q4, the rate rollercoaster saw a powerful oil rebound, a Bank of England hike of 15bp and a hawkish December Federal Open Market Committee signaling a faster taper and sooner hikes.
Strategy performance (net of fees)
Since inception (February 2015): 111.5%
Best-performing positions
| EUR/USD | 5.1% |
| USD/JPY | 3.5% |
| GBP/USD | 2.2% |
EUR/CAD
| 1.7% |
| AUD/JPY | 1.4% |
Worst-performing positions
| USD/CHF | -1.7% |
| USD/CAD | -3% |
| NZD/USD | -3% |
| EUR/CHF | -2% |
| CAD/CHF | -1% |
Outlook
The Fed has signaled tighter monetary policy by hiking rates sooner alongside Quantitative Tightening that can begin as early as this summer with the objective of avoiding an aggressive flattening of the US Treasuries yield curve as rates increase. This is considered bad news for the short-term economic outlook.
Whilst the Fed and sharply higher US rates were observed in early 2022, the USD has not yet responded. Excessively high inflation is currently a universal phenomenon. Various Central Banks worldwide have responded with announcements of multiple hikes starting in Q1 2022.
Thus the USD is not alone in finding rate support and we watch to see how the data unfolds and how risk markets and commodities respond to the fast moves in rates. In contrast, there are pieces of information from official news outlets for easier policy in China as they deal with a strategy of covid zero lockdowns and the housing slowdown.
