In April 2023:
1/Concerns Over Financial Stability – Part 2, 2/ China Rebounds and US Tensions, 3/ Tradetech in Paris
1/ Concerns Over Financial Stability - Part 2. The situation has been contained and volatility declined. On the fixed income side, while the MOVE Index hit a high at 198.71 on March the 15th, it declined to the 120 area by the end of April. The pressure also eased on the equity side and the VIX closed below 16 for the first since November 2021. The period running from the SVB news early March to the end of April saw safe-haven as well as risky assets in demand. Gold rose by 6.52% to $1982.56. Buying pressure on the US 10Y benchmark, dragged its yield 27bps lower to 3.42%. On the risky asset side, the SPX rose by 7.97% to 4169.48 and the US HY CDS improved by 44bps to 4.65% to come back to level before the news series that agitated the market. Further inversion to the curve took place since March. The spread between the US 10Y and the 3M declined by 75bps to -166bps
2/China Rebounds and US Tensions. Q1 2023 Chinese GDP rose by 4.5% YoY, from 2.9% in Q4 2022. President Biden was aiming to sign an executive order that will limit investment in key parts of China’s economy by American businesses. Since the end of January, the MSCI China A, as measured by the CNYA LN, has erased 50% of the gains from the reopening.
3/Tradetech au Palais des Congres de Paris. It was a great industry event where we had the opportunity to meet with our counterparts and partners. We had interesting conversations, attended nice conferences. We are looking forward to attending the next edition.
April Performance highlights (USD)
• Equity Indices: MSCI CHINA: -2.06%, NASDAQ: +0.49%, SPX: +1.46%,, MSCI WORLD: +1.59%, SX5E: +2.71%, MSCI EUROPE: +3.67%, STOXX EUROPE 600 OPTIMISED DEFENSIVE PRICE: +6.24%, • Bonds: GER 10Y: 2bps, US 10Y: -5bps, GER 2Y: 1bps, US 2Y: -2bps, • Commodities: Gold: +1.05%, Oil: +1.47%, • FX: DXY: -0.83%, USDJPY: +2.59% From a regional perspective, International DM, Asia ex Japan and France equities were bought while US Europe and EM equities were sold. On the fixed income side, US government bonds were in demand.
• On equity indices: The S&P500, MSCI WORLD ESG, MSCI USA CLIMATE ESG, NASDAQ, MSCI EUROPE ESG recorded a mixed activity. The MSCI EMU and MSCI EUROPE were sold.
• On fixed income: US TREASURIES the US 1-3, 3-7Y, and 20Y+ were bought. The US 7-10Y recorded a mixed activity. On the other hand, US 0-12M were sold.