Income & Fixed Interest Newsletter – March 2016
March was a fitting end to a very – very – volatile quarter. In fact it was the first time since 1933 that the S&P index has traded down 10% and then finished the quarter in positive territory. The key event of the month, and the quarter, was the Fed explicitly stepping back from its hiking bias and causing a significant unwind in US Dollar positioning. While we had expected the Fed to wind back hiking expectations, the complete volte-face was stunning and highlights the risk to the US economy ahead.
With central banks around the world continuing to drive ahead with monetary stimulus the month saw a decent rally in commodities and credit securities. In this Newsletter I examine the rally to see if it has legs or if it’s just another bump on a continued downward path.