• Positive month for bond markets: Fund’s QAEUR hedged class gained 1% and +3.95% YTD
• Fed expected to raise rates in June and UST yield curve flattens: Fed ‘ahead of the curve’
• Treasuries and the Russia holdings amongst the portfolio’s top performers
• US dollar retreats back to pre US election levels
May was generally a positive month for bond markets helped by a solid performance from US Treasuries and the VIX index of volatility making what was then new lows albeit with a temporary spike as yet another Brazilian President, this time Michel Termer, faced investigation over bribery allegations. A combination of some mixed US economic data and President Trump’s political difficulties dampened expectations for meaningful growth boosting policy initiatives. The US Treasury 10-year yield compressed 8 basis points to 2.2% at month end and the Treasury yield curve flattened as a benign inflation picture increased confidence that the Fed is ‘ahead of the curve’. The US dollar index retreated 2.15% back to pre US Presidential levels.