RBF UCITS Monthly - August 2017

  • Chinese renminbi rallied against the dollar; currency is up 5.74% year-to-date
  • The Fund’s ID USD  Class was up 3.15% in August; +14.63% year to date.
  • US Treasury and Middle Eastern holdings outperformed
  • US-North Korea tensions expected to remain elevated
  • Expect renminbi to continue steady appreciation; benefiting from safe haven flows

Geopolitics commanded market focus in August as North Korea launched a number of threatening ballistic missiles. US-North Korea tensions overshadowed broadly positive data releases out of the US where, for example, the second estimate for Q2’17 GDP was revised up to 3% and the US ISM manufacturing reading for August bounced to its highest reading since 2011. Towards the end of the month, US Treasury yields dipped to their lowest level so far this year, and closed 18bps lower over the month, at 2.12%. Meanwhile, the dollar also suffered further weakness, with the DXY index falling 0.21% in August, having also tumbled to year lows during the month.

Elsewhere, the Chinese renminbi rallied to 15-month lows against the dollar; gaining 5.74% so far this year, on a spot basis. We calculate the carry on the offshore currency stands at 3.16% year-to-date, with total return at 8.9% against the dollar. China data releases remained supportive of growth last month.

Full PDF