Welcome to our latest edition of Portfolio Watch, our weekly deep-dive into prevailing market trends and our portfolio strategies. In this updated iteration of our series, we’ll explore the latest updates in both our Macro Alpha Portfolio and our Digital Assets Portfolio.

Additionally, we’re excited to announce that we’re just about ready to introduce to you our quantitative portfolio. Keep an eye out for this upcoming launch.

Macro Portfolio: Sea of cyclical green

We’ve been early in flagging the pro-cyclical trends observed in our models, but markets have to some extent caught on and remain firmly in a procyclical rotation mode. Copper has broken above the 390 handle, Chinese proxies such as Korea and Australia are on the move in equity and FX space, and we’ve seen a big move in the KRW this morning. 

With several Central Bank events, ECB meeting and Powell testimony the most significant, we have been affirmed in our view that Fed will allow the economy to reflate here. We got the same vibe from the ECB, which is pretty pessimistic on growth and expecting to hit 2% inflation in 2025 based on the assumption of 100 bps worth of easing in the EURIBOR assumptions.

In general, our optimistic outlook for an acceleration in manufacturing/cyclical activity still holds and continues to perform, and we consequently remain very confident in our short bets in cycle-linked USDSEK and CHFJPY.

Chart 1: Composition is clearly improving in the ISM PMI