NGGBF UCITS Monthly - September 2017

• The Fund’s QAEUR hedged Class was down 0.62% in September; up 4.67% year to date
• Fed held rates, but more hawkish rhetoric insinuates a further rate hike in December
• Russia's long-term debt outlook upgraded to positive by Fitch
• Tax reform and subsequent effect on debt ceiling will be monitored closely

A mixed month across asset markets was once again driven by geopolitics and central bank
rhetoric. Fed Chair Yellen’s seemingly hawkish tones drove a sell-off in UST yields; this was
further compounded by the proposed ‘revolutionary’ US tax plan. What concerns us is the
tax-plan’s eventual effect on the debt ceiling; we expect to hear more on this by year-end.
Nonetheless, the yield on the 10-year UST was up 22bps and USD gained momentum; the
DXY Index closed the month 0.44% higher.

Meanwhile, the Fed held rates at 1%-1.25%, we heard further mixed messages from Fed members with those in acceptance of lowly inflation calling for further hikes, while others remained  concerned  of  hiking  too  quickly  with  lacklustre  price  pressures.  The  futures market, however, received a wake-up call after Yellen’s address, where she reiterated that a December  hike  is  clearly  a  possibility.  Gold  unsurprisingly  nosedived  in  September; meanwhile Brent rallied 7.48%.

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