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CurAlea Associates LLC is an independent risk and due diligence advisory firm focused on hedge funds and family offices.

Tuesday, December 13, 2016

Year End 2016

Twenty and sixteen, over in a flash,
Remembered it will be, for the Trump and Clinton clash.
To follow up Obama, on the presidential throne,
Hillary or the Donald, a poorer choice we've never known.
The one a scheming liberal, always above the law,
The other an inflated ego, looking at himself with awe.
She had more votes by millions, and allegedly more knowledge,
With deplorables in his corner, he took the electoral college.

This year we had some horrors, all of them causing fright,
Such as the Zika virus, spread by a mosquito bite.
Bombings in Brussels, Belgium, a crazed driver in Nice, France,
Fanatics bent on killing, innocent victims of circumstance.
In Oakland a warehouse fire, where 36 did die,
In Orlando a nightclub shooting, that leaves you asking why?
In Aleppo death and carnage, by Assad a true barbarian,
If you don’t know where that is, don’t ask a libertarian.

In sports we had nice action, led by a guy named Manning,
Who then retired at the top, leaving Newton also ran-ning.
Always much excitement, in the world of college ball,
Villanova at the buzzer, leaving Carolina feeling small.
LeBron brought it home in Cleveland, after going down three to one,
Despite a Warrior record season, 88 games they won.
In Chicago they're still celebrating, the kids, the wives, and hubbies,
After a century long hiatus, the victory of their Cubbies.

Again we lost some great ones, some women and some men,
Mrs. Brady Florence Henderson, the astronaut John Glenn.
Gene Wilder and David Bowie, the word genius they evince,
The doves are all still crying, at the sudden loss of Prince.
Muhammad Ali was the greatest, in a fight no one was calmer,
He mixed lemonade and tea, the golf king Arnold Palmer.
Fidel Castro was a menace, a commie tyrant like no other,
In Cuba they’re still suffering, in the shackles of the brother.

In the markets things were choppy, until the election gave direction,
Many hedge funds lost real money, buying useless put protection.
In long/short returns were tough, being down or flat the norm,
As the small caps and the value, did strongly outperform.
Passive flows keep rising, bringing higher correlation,
From bonds to stocks some say, we’re in a generational rotation.
Uncertain is the future, try as we might to see it squinting,
The Fed too knows not what’s coming, or the harms of money printing.

Populism’s all the rage, as people 'round the world revolt,
The status quo's being upended, at the speed of Phelps and Bolt.
Paul Revere said the Brits were coming, from the EU now they're leaving,
For the European experiment, it may be time to start the grieving.
The Bushes and the Clintons, their time it has now passed,
America wants change, in its political crew and cast.
And what about Chris Christie, who drove his career off of a bridge,
He’s somewhere back in Jersey, seeking solace in his fridge.

So the election is now over, though the tweets are just beginning,
He says he'll make us great again, and that we’ll all get used to winning.
Don't lose much sleep for Hillary, she won't suffer from starvation,
She's saved up quite a nest egg, in that dirty Bill & Hill Foundation.
After eight years of his lectures, we won't much Obama miss,
As we head into a world, of pure Republican bliss.
In this year's holiday season, please don't be a Scrooge,
Let's pray for one another, and for this Trump thing to be huge.

Thursday, December 1, 2016

November 2016 - Monthly Market Commentary

November was a mixed month for global risk assets.  Developed market equities were mixed, emerging market equities were mostly lower with wide dispersion across geographies, the USD strengthened, US interest rates rose across the curve, commodities were mixed, and corporate credit spreads tightened.  Markets in November were dominated by the US election and the surprise Trump victory.  After a brief selloff in equity futures on the night of the election, US equity markets rallied sharply and made several new highs during the month.  Prior to the election, the Federal Reserve left rates unchanged, but indicated that a rate hike was more likely at their December meeting due to a recent pick up in core inflation.  The Bank of England surprised markets by lowering expectations for a further rate cut, as the impact of Brexit on the British economy appears to be smaller than initially feared.  Meanwhile in Japan and in reaction to rising interest rates following the US election, the Bank of Japan offered to buy an unlimited amount of Japanese government bonds to keep rates from rising too much.  The US job report showed that 161,000 jobs were added in October, the unemployment rate fell to 4.9%, and the labor force participation rate ticked down to 62.8%; average hourly earnings for private sector workers rose 2.8%, the highest annual rate since June 2009. 
Notable corporate transactions announced in November included the $5.5 billion acquisition of Brocade Communication Systems by Broadcom, the $500 million purchase of Blue Nile by Bain Capital and Bow Street, Blackstone’s $3.7 billion acquisition of OfficeFirst Immobilien, the sale of Harman to Samsung Electronics for $8 billion, the $4.5 billion acquisition of Mentor Graphics by Siemens, Tesoro’s $4.1 billion purchase of Western Refining, the $2.3 billion purchase of LifeLock by Symantec, and Ctrip’s $1.7 billion acquisition of Skyscanner .
Developed market equity markets were mixed in November (see page 8), with the largest gains in Japan (+5.8%), the S&P 500 (+3.6%), and Australia (+3.4%); the worst performing were Spain (-5.4%), the UK (-2%), and Hong Kong (-1.6%).  US small caps strongly outperformed large caps, with the Russell 2000 up 11.2% and the Russell 1000 up 3.9% (see page 3).  Financials (+13.9%), Industrials (+8.8%), and Energy (+8.4%) were the best performing sectors in November, while Utilities (-5.4%), Consumer Staples (-4.3%), and Real Estate (-3.1%) were the worst performing (see page 2).  Large cap growth (+2.2%) underperformed large cap value (+5.7%) in November (see page 3).  Emerging Market equities were mostly lower in November (see page 9), with the biggest gains in Russia (+6.5%) and Thailand (+0.4%); Indonesia (-9.1%), Argentina (-9%), and the Philippines (-8.7%) were the worst performing. 
In currencies, the USD Index was up 3.1% in November (see page 10).  The weakest developed market currencies against the USD were the Japanese Yen (-8.4%), Euro (-3.6%), and Norwegian Krone (-3.1%), while gains were seen in the British Pound (+2.2%).  Emerging market currencies were lower against the USD, with the biggest losses in the Turkish Lira (-10%), Mexican Peso (-8.3%), and Malaysian Ringgit (-6%).
The US Treasury yield curve shifted higher as rates rose across the curve in November (see page 12).  10 year rates closed the month at 2.38%, up from 1.83% at October month end.  Investment grade and high yield credit spreads tightened in November (see page 13).
In commodities, the GSCI index was up 2.5% in November (see page 11), with gains in Industrial Metals (+10.4%), Livestock (+5.7%), and Energy (+3.9%), and losses in Precious Metals (-8%) and Agriculture (-4.2%).  Within individual commodities, Palladium (+24.8%), Copper (+20%), and Feeder Cattle (+10.8%) saw the biggest gains, while Cocoa (-11.9%), Coffee (-10.2%), and Sugar (-8.1%) saw the biggest losses.  Gold was down 8% in November.

Contact CurAlea Associates for a Daily Market Review.

Tuesday, November 1, 2016

October 2016 - Monthly Market Commentary

October was a mixed month for global risk assets.  Developed and emerging market equities were mixed with fairly high dispersion across geographies, the USD strengthened, US interest rates rose and the curve steepened, commodities were mixed, and credit spreads widened slightly.  Minutes from the September Federal Reserve meeting indicated that several officials were in favor of raising rates; markets now expect an interest rate hike after the US election in December.  The ECB left its stimulus program unchanged, and indicated that an extension of their bond purchase program was likely to be announced at the December meeting.  As Brexit discussions intensified, the British pound fell to a 31 year low against the US dollar.  Third quarter US GDP expanded at a 2.9% inflation adjusted annual rate.  The US job report showed that 156,000 jobs were added in September, the unemployment rate rose to 5%, and the labor force participation rate ticked up to 62.9%. 
Notable corporate transactions announced in October included the $4.5 billion acquisition of Cabela’s by Bass Pro Shops, Samsung’s purchase of Viv Labs, the sale of some of AIG’s Latin American and European property and casualty operations to Fairfax Financial for $240 million, a $47 billion bid by BAT to take full control of Reynolds American, AT&T’s $80 billion acquisition of Time Warner, the $4 billion purchase of Scottrade by TD Ameritrade, Qualcomm’s $39 billion acquisition of NXP Semiconductors, the combination of GE’s oil and gas business with Baker Hughes, creating a company with $32 billion in revenue, CenturyLink’s $25 billion acquisition of Level 3, and Blackstone’s $3.2 billion purchase of Team Health.
Developed market equity markets were mostly higher in October (see page 8), with the largest gains in Spain (+5.8%), Japan (+5.1%), and Italy (+4.3%); the worst performing were the S&P 500 (-1.9%), Australia (-1.6%), and Hong Kong (-1.2%).  US small caps underperformed large caps, with the Russell 2000 down 4.8% and the Russell 1000 down 2% (see page 3).  Financials (+2.3%), Utilities (+0.9%), and IT (-0.1%), were the best performing sectors in October, while Healthcare (-6.5%), Telecom (-6.5%), and Energy (-2.9%) were the worst performing (see page 2).  Large cap growth (-2.3%) underperformed large cap value (-1.5%) in October (see page 3).  Emerging Market equities were mixed in October (see page 9), with the biggest gains in Brazil (+11.1%), Taiwan (+2.1%), and Mexico (+2%); the Philippines (-2.9%), China (-1.9%), and Thailand (-1.3%) were the worst performing. 
In currencies, the USD Index was up 3.1% in October (see page 10).  The weakest developed market currencies against the USD were the British Pound (-5.6%), Swedish Krona (-5.1%), and Norwegian Krone (-3.4%).  Emerging market currencies were mixed against the USD, with the biggest gains in the Mexican Peso (+2.8%), Brazilian Real (+2.2%), and South African Rand (+1.9%); the Korean Won (-3.7%), Turkish Lira (-3%), and Singapore Dollar (-2%) weakened.
The US Treasury yield curve steepened and rates rose across the curve in October (see page 12).  10 year rates closed the month at 1.83%, up from 1.60% at September month end.  Investment grade and high yield credit spreads widened slightly in October (see page 13).
In commodities, the GSCI index was down 1.5% in October (see page 11), with gains in Livestock (+4.2%), Agriculture (+2.4%), and Industrial Metals (+1.1%), and losses in Energy (-3.5%) and Precious Metals (-3.8%).  Within individual commodities, Lean Hogs (+9.1%), Coffee (+8.3%), and Corn (+5.4%) saw the biggest gains, while Palladium (-14.3%), Silver (-7.4%), and Sugar (-6.2%) saw the biggest losses.  Gold was down 3.3% in October.

Contact CurAlea Associates for a Daily Market Review.

Friday, October 21, 2016

CurAlea Associates LLC Wins Numerous Industry Awards In 2016

October 21, 2016

PRINCETON – CurAlea Associates LLC has been named the winner of numerous awards in 2016 by Corporate America (Best Hedge Fund Risk Management Advisor – USA), Acquisition International (Best Hedge Fund Risk Management Firm – New Jersey), Wealth & Finance International (Best Hedge Fund Due Diligence Firm – USA, Best Hedge Fund Advisory – East USA, Excellence in Asset Allocation – East USA), the American Economic Institute (Excellence in Leadership), and Investor Review (Best Family Office Asset Allocation Service – New York). 

CurAlea Associates LLC was established in 2010 to provide customized risk advisory and software solutions to hedge funds and family offices.  CurAlea's clients have aggregate AUM in excess of $50 billion.  While risk solutions remain CurAlea’s primary focus, the firm has seen growing interest in its customized software solutions.  CurAlea works with clients on a project specific basis and on an ongoing retainer basis.

On winning these awards, co-founder Seb Calabro said: “We are very pleased to be recognized again for excellence across our risk advisory, due diligence, asset allocation, and family office services.  We are proud of the customized solutions that we provide to our clients and it is rewarding to be recognized as leaders in our industry."








Monday, October 3, 2016

September 2016 - Monthly Market Commentary

September was a decent month for global risk assets.  Developed and emerging market equities were mostly higher, as were commodities, the USD weakened slightly, and credit spreads were little changed.  The Federal Reserve again made no change to interest rates, but indicated that an increase is still likely before year end.  In Europe, the ECB also made no change to its stimulus program.  In England, the BOE also left rates unchanged, and also indicated that another cut is likely before the end of 2016.  In Japan, the BOJ for the first time introduced a target of zero for 10 year interest rates and indicated that it would adjust its bond purchases to achieve that target.  The US job report showed that 151,000 jobs were added in August; the unemployment rate remained at 4.9% and the labor force participation rate remained at 62.8%. 
Notable corporate transactions announced in September included the $460 million sale of a stake in Yum Brands’ China business to a group that includes Primavera Capital and Ant Financial Services, Intel’s acquisition of computer vision chip maker Movidius, Enbridge’s $28 billion purchase of Spectra Energy, The $4.4 billion sale of Formula One to Liberty Media, the $8.8 billion spin off and merger of HP Enterprises’ software business with Micro Focus International, the $4.2 billion sale of a 51% stake in Intel’s computer security business to TPG, the $20.6 billion merger of Agrium and Potash, HP’s $1 billion purchase of Samsung’s printer business, Bayer’s $66 billion acquisition of Monsanto, Allergan’s $639 million purchase of Vitae Pharmaceuticals and $1.7 billion purchase of Tobira Therapeutics, J&J’s acquisition of Abbott Lab’s eye surgery equipment business, Apple’s acquisition of Tuplejump, and CBOE’s $3.2 billion purchase of Bats Global Markets.
Developed market equity markets were mostly higher in September (see page 8), with the largest gains in Hong Kong (+3.6%), Australia (+2.5%), and Japan (+1.6%); the worst performing were Italy (-3%), the S&P 500 (0%), and Germany (+0.4%).  US small caps outperformed large caps, with the Russell 2000 up 1.1% and the Russell 1000 up 0.1% (see page 3).  Energy (+3.1%), IT (+2.4%), and Utilities (+0.4%), were the best performing sectors in September, while Financials (-2.7%), Consumer Staples (-1.5%), and Materials (-1.3%) were the worst performing (see page 2).  Large cap growth (+0.4%) outperformed large cap value (-0.2%) in September (see page 3).  Emerging Market equities were mixed in September (see page 9), with the biggest gains in Argentina (+5.3%), Russia (+3.9%), and Taiwan (+2.9%); the Philippines (-5.6%), Thailand (-3.5%), and Mexico (-3.3%) were the worst performing. 
In currencies, the USD Index was down 0.6% in September (see page 10).  The weakest developed market currencies against the USD were the British Pound (-1.3%), while the Norwegian Krone (+4.4%), Japanese Yen (+2.1%), and Australian Dollar (+2%) strengthened most against the USD.  Emerging market currencies were mostly stronger against the USD, with the biggest gains in the South African Rand (+7.4%), Russian Ruble (+4%), and Indonesian Rupiah (+1.9%); the Mexican Peso (-3.1%), Turkish Lira (-1.4%), and Brazilian Real (-1%) weakened.
The US Treasury yield curve was little changed in September (see page 12).  10 year rates closed the month at 1.60%, up from 1.58% at August month end.  Investment grade and high yield credit spreads were little changed in September (see page 13).
In commodities, the GSCI index was up 4.1% in September (see page 11), with gains in Energy (+6.1%), Industrial Metals (+5.1%), Agriculture (5%), and Precious Metals (+0.7%), and losses in Livestock (-12.1%).  Within individual commodities, Gasoline (+11.4%), Sugar (+11.3%), and Palladium (+7.7%) saw the biggest gains, while Lean Hogs (-22.1%), Feeder Cattle (-12%), and Live Cattle (-6.9%) saw the biggest losses.  Gold was up 0.5% in September.

Contact CurAlea Associates for a Daily Market Review.

Tuesday, September 6, 2016

August 2016 - Monthly Market Commentary

August was another generally positive month for global risk assets.  Developed and emerging market equities were mostly higher, with US stock indexes hitting new record highs, the US Dollar index was up slightly, commodities were mixed, and credit spreads tightened slightly.  The July Fed minutes indicated that central bank officials remain split on determining when to increase interest rates, though at their Jackson Hole gathering, Chairwoman Yellen indicated that an increase was likely in the coming months.  In the UK, in addition to announcing several new asset purchase and funding programs, the Bank of England cut the benchmark interest rate to the lowest level in its 322 year history in response to the June 23 Brexit vote.  In Australia, the central bank reacted to low inflation and a weak jobs market by cutting the cash rate to a new record low.  The US job report showed that 255,000 jobs were added in July; the unemployment rate remained at 4.9% and the labor force participation rate ticked higher to 62.8% from 62.7%. 
Notable corporate transactions announced in August included the acquisition of Uber’s China operations by Didi Chuxing along with a $1 billion investment by Didi in Uber, Carlyle’s acquisition of 70% of China focused outsourcing company VXI Global Solutions with a valuation of $1 billion, Steinhoff International’s $2.4 billion takeover of Mattress Firm Holding, Walmart’s $3.3 billion acquisition of Jet.com, Intel’s purchase of Nervana Systems for $350 million, Disney’s acquisition of a one-third stake in BAMTech for $1 billion, Apple’s purchase of Turi for $200 million, Samsung’s acquisition of Dacor, HP Enterprise’s acquisition of Silicon Graphics for $275 million, the sale of AIG’s mortgage insurance business to Arch Capital for $3.4 billion, Pfizer’s acquisition of Medivation for $14 billion, and Pfizer’s purchase of part of AstraZeneca’s antibiotics business for $1.6 billion.
Developed market equity markets were mostly higher in August (see page 8), with the largest gains in Germany (+2.4%), Spain (+1.7%), and the UK (+1.5%); the worst performing were Australia (-1.5%), France (-0.1%), and the S&P500 (+0.1%).  US small caps outperformed large caps, with the Russell 2000 up 1.8% and the Russell 1000 up 0.1% (see page 3).  Financials (+3.8%), IT (+2.1%), and Energy (+1.2%), were the best performing sectors in August, while Telecom (-5.7%), Utilities (-5.6%), and Healthcare (-3.3%) were the worst performing (see page 2).  Large cap value (+0.8%) outperformed large cap growth (-0.5%) in August (see page 3).  Emerging Market equities were mostly higher in August (see page 9), with the biggest gains in China (+7.3%), Thailand (+3%), and Indonesia (+2.8%); the Philippines (-2.8%), Argentina (-2.2%), and Brazil (+0.9%) were the worst performing. 
In currencies, the USD Index was up 0.5% in August (see page 10).  The weakest developed market currencies against the USD were the Swiss Franc (-1.5%), Japanese Yen (-1.3%), and Australian Dollar (-1%), while the Norwegian Krone (+1.4%) and New Zealand Dollar (+0.7%) strengthened most against the USD.  Emerging market currencies were mixed against the USD, with the biggest gains in the Turkish Lira (+0.9%), Russian Ruble (+0.9%), and Brazilian Real (+0.7%); the South African Rand (-5.7%), Malaysian Ringgit (-1.7%), and Indonesian Rupiah (-1.6%) weakened.
The US Treasury yield curve shifted higher in August (see page 12).  10 year rates closed the month at 1.58%, up from 1.46% at July month end.  Investment grade and high yield credit spreads tightened slightly in August (see page 13).
In commodities, the GSCI index was up 1.8% in August (see page 11), with gains in Energy (+6.1%) and losses in Agriculture (-5.7%), Precious Metals (-4%), Industrial Metals (-3.2%), and Livestock (-0.4%).  Within individual commodities, Gasoline (+7.4%), Heating Oil (+7.2%), and Brent Crude (+6.9%) saw the biggest gains, while Cotton (-11.4%), Wheat (-9.3%), and Silver (-8.6%) saw the biggest losses.  Gold was down 3.4% in August.

Contact CurAlea Associates for a Daily Market Review.

Monday, August 1, 2016

July 2016 - Monthly Market Commentary

July was a generally positive month for global risk assets.  Developed and emerging market equities were mostly higher (in many cases sharply higher), the US Dollar index was down slightly, commodities were mostly lower, and credit spreads tightened.  Early in the month, the US 10 year Treasury yield hit a record low and Japan’s 20 year government bond yield went negative for the first time.  The Bank of England and European Central Bank left rates unchanged, though both indicated that they may provide additional stimulus later this year as the economic impact of Brexit becomes more clear.  The Federal Reserve also held rates steady, but indicated that they may raise rates later in the year.  The Bank of Japan announced additional stimulus in the form of additional ETF fund purchases, though the package disappointed investors that were expecting a larger spending plan.  The US GDP report for the second quarter showed that the US economy grew at an annual rate of just 1.2%, while first quarter growth was revised lower to 0.8%.  The US job report showed that 287,000 jobs were added in June, the strongest report since October 2010; the unemployment rate rose to 4.9% and the labor force participation rate ticked higher to 62.7% from 62.6%. 
Notable corporate transactions announced in July included the acquisition of Whitewave by Danone for $10 billion, Avast Software’s $1.3 billion acquisition of AVG, the $4 billion purchase of mixed martial arts organization UFC by a group of investors led by the WME-IMG Hollywood talent agency, Tencent’s acquisition of a controlling stake in China Music Corp., Softbank’s $32 billion purchase of ARM Holdings, Unilever’s $1 billion purchase of Dollar Shave Club, Komatsu’s $2.9 billion acquisition of Joy Global, Verizon's $4.8 billion purchase of Yahoo’s web assets, the $9.3 billion acquisition of NetSuite by Oracle, and NextEra’s $18.4 billion purchase of Energy Future Holdings’ stake in Oncor.
Developed market equity markets were higher in July (see page 8), with the largest gains in Hong Kong (+6.9%), Germany (+6.7%), and Japan (+6.4%); the worst performing were the UK (+3.5%), Italy (+3.6%), and the S&P500 (+3.6%).  US small caps outperformed large caps, with the Russell 2000 up 6% and the Russell 1000 up 3.8% (see page 3).  IT (+7.9%), Materials (+5.1%), and Healthcare (+4.9%), were the best performing sectors in July, while Energy (-1.9%), Consumer Staples (-0.7%), and Utilities (-0.7%) were the worst performing (see page 2).  Large cap value (+2.9%) underperformed large cap growth (+4.7%) in July (see page 3).  Emerging Market equities were mostly higher in July (see page 9), with the biggest gains in Brazil (+11%), Thailand (+6.3%), and Taiwan (+5.5%); Argentina (-0.3%), Malaysia (+0.1%), and Mexico (+1.3%) were the worst performing. 
In currencies, the USD Index was down 0.6% in July (see page 10).  The weakest developed market currencies against the USD were the Swedish Krona (-1.2%), Norwegian Krone (-1%), and Canadian Dollar (-0.9%), while the Australian Dollar (+1.9%), Japanese Yen (+1.1%), and New Zealand Dollar (+0.9%) strengthened most against the USD.  Most emerging market currencies were higher against the USD, with the biggest gains in the South African Rand (+6%), Korean Won (+3.7%), and Taiwan Dollar (+1.3%); the Turkish Lira (-3.6%), Russian Ruble (-3%), and Mexico Peso (-1.8%) weakened.
The US Treasury yield curve flattened slightly in July (see page 12).  10 year rates closed the month at 1.46%, down slightly from 1.49% at June month end.  Investment grade and high yield credit spreads tightened in July (see page 13).
In commodities, the GSCI index was down 9.6% in July (see page 11), with gains in Precious Metals (+3.1%) and Industrial Metals (+2%), and losses in Energy (-13.6%), Livestock (-7.4%), and Agriculture (-6.5%).  Within individual commodities, Palladium (+18.8%), Cotton (+15.4%), and Platinum (+12.4%) saw the biggest gains, while Lean Hogs (-17.5%), Crude Oil (-15.3%), and Heating Oil (-13.6%) saw the biggest losses.  Gold was up 2.3% in July.

Contact CurAlea Associates for a Daily Market Review.

Friday, July 1, 2016

June 2016 - Monthly Market Commentary

June was a mixed month for global risk assets.  Developed market equities were mostly lower, emerging market equities were mostly higher, the US dollar index was up slightly, though this masked very large moves in individual currency pairs, commodities were mostly higher, credit spreads widened, though recovered most of their intra month losses, and the US yield curve flattened.  The biggest macro news in June was the Brexit vote in the United Kingdom that shocked most pundits and global risk markets; while the long term implications of the vote remain unclear, analysts believe that it is likely to pull at least the UK into a near term recession.  In the US, the Federal Reserve kept interest rates unchanged and lowered expectations of future rate hikes.  Government bond yields continued to fall around the world in June, and the German 10 year bund fell below zero for the first time ever.  The US job report showed that just 38,000 jobs were added in May, the weakest report since September 2010; the unemployment rate fell to 4.7% and the labor force participation rate fell from 62.8% to 62.6%. 
Notable corporate transactions announced in June included the acquisition of EZSource by IBM, National Oilwell Varco’s acquisition of Trican Well Services’s completion tools business, the $4.7 billion purchase of Blue Coat Systems by Symantec, Microsoft’s $26.2 billion acquisition of LinkedIn, Broadridge Financial’s $410 million purchase of DST’s North American customer communications business, Tencent’s $8.6 billion purchase of a majority stake in Supercell, Samsung’s acquisition of Joyent, Kion Group's $2.1 billion purchase of Dematic, the $293 million acquisition of CloudLock by Cisco, the $290 million purchase of Cantab Capital by GAM, and Lions Gate’s $4.4 billion acquisition of Starz.
Developed market equity markets were mostly lower in June (see page 8), with the largest losses in Japan (-9.8%), Spain (-9.7%), and Italy (-9.6%); the UK (+5%), Hong Kong (+0.8%), and the S&P500 (+0.2%) moved higher.  US small caps slightly underperformed large caps, with the Russell 2000 down 0.1% and the Russell 1000 up 0.2% (see page 3).  Telecom (+9.3%), Utilities (+7.8%), and Consumer Staples (+5.2%), were the best performing sectors in June, while Financials (-3.2%), IT (-2.8%), and Consumer Discretionary (-1.2%) were the worst performing (see page 2).  Large cap value (+0.9%) outperformed large cap growth (-0.4%) in June (see page 3).  Emerging Market equities were mostly higher in June (see page 9), with the biggest gains in Brazil (+6.3%), Indonesia (+5.9%), and the Philippines (+5.3%); Russia (-0.4%), Thailand (+0.3%), and Korea (+0.6%) were the worst performing. 
In currencies, the USD Index gained 0.3% in June (see page 10).  The weakest developed market currencies against the USD were the British Pound (-8.1%), Swedish Krona (-1.5%), and Euro (-0.2%), while the Japanese Yen (+7.3%), New Zealand Dollar (+5.5%), and Australian Dollar (3%) strengthened.  Most emerging market currencies were higher against the USD, with the biggest gains in the Brazilian Real (+12.4%), South African Rand (+6.7%), and Russian Ruble (+4.2%); the Chinese Yuan (-0.9%) and Indian Rupee (-0.4%) weakened.
The US Treasury yield curve flattened in June (see page 12).  10 year rates closed the month at 1.49%, down sharply from 1.83% at May month end.  Investment grade and high yield credit spreads widened in June, though recovered most of their intra month losses (see page 13).
In commodities, the GSCI index was up 0.1% in June (see page 11), with gains in Precious Metals (+9.3%) and Industrial Metals (+5.7%), losses in Energy (-1.2%) and Livestock (-1.2%), and Agriculture flat.  Within individual commodities, Natural Gas (+24.2%), Coffee (+18.2%), and Silver (+16.1%) saw the biggest gains, while Corn (-10.5%), Gasoline (-7.5%), and Wheat (-6.1%) saw the biggest losses.  Gold was up 8.5% in June.

Contact CurAlea Associates for a Daily Market Review.

Wednesday, June 1, 2016

May 2016 - Monthly Market Commentary

May was a mixed month for global risk assets.  Developed market equities were mostly higher, emerging market equities were mixed, the US dollar strengthened, oil continued its rebound, while other commodities were mixed, credit spreads were little changed, and the US yield curve flattened.  In the minutes from its April meeting, the Federal Reserve indicated that an interest rate increase was a distinct possibility in June, surprising many investors who had assumed that a June rate hike was off the table.  On the second to last trading day of May, Chairwoman Yellen suggested that a rate increase would be appropriate “probably in the coming months”.  The US job report showed 160,000 jobs were added in April, while the unemployment rate was steady at 5% and the labor force participation rate fell from 63% to 62.8%. 
Notable corporate transactions announced in May included the $1.9 billion acquisition of Weyerhauser’s pulp business by International Paper, the $3.8 billion purchase of Air Products & Chemicals’ performance-materials division by Evonik, JAB Holding’s $1.35 billion acquisition of Krispy Kreme Doughnuts, Nissan’s $2.2 billion purchase of a 34% stake in Mitsubishi Motors, Apple’s $1 billion investment in Didi Chuxing Technology, Pfizer’s $5.2 billion acquisition of Anacor Pharmaceuticals, Range Resources' $3.3 billion purchase of Memorial Resource Development, the $13 billion merger of FMC Technologies and Technip, the $3.4 billion acquisition of American Capital by Ares Capital, the $8.5 billion spin off of Hewlett Packard Enterprises’ technology services business and subsequent merger with Computer Sciences, Great Plains Energy’s $8.6 billion purchase of Wester Energy, and Jazz Pharmaceuticals’ $1.5 billion acquisition of Celator Pharmaceuticals.
Developed market equity markets were mostly higher in May (see page 8) led by Australia (+2.8%), France (+2.7%), and Japan (+2.6%).  US small caps outperformed large caps, with the Russell 2000 up 2.3% and the S&P 500 up 1.8% (see page 2).  IT (+5.6%), Health Care (+2.2%), and Financials (+2.0%), were the best performing sectors in May, while Energy (-0.6%), Industrials (-0.5%), and Materials (-0.3%) were the worst performing (see page 2).  Large cap value (+1.6%) underperformed large cap growth (+1.9%) in May (see page 3).  Emerging Market equities were mixed in May (see page 9), with the biggest gains in the Philippines (+4.2%), India (+3.3%), and Taiwan (+2.9%); Brazil (-9.9%), Russia (-4.0%), and Malaysia (-2.1%) were the worst performing. 
In currencies, the USD Index gained 3% in May (see page 10).  The weakest developed market currencies against the USD were the Australian Dollar (-4.9%), Canadian Dollar (-4.1%), and Japanese Yen (-4.0%).  The USD was also stronger against emerging market currencies with the biggest gains against the South African Rand (-9.4%), Mexican Peso (-7%), and Turkish Lira (-5.2%).
The US Treasury yield curve flattened in May (see page 12) as yields at the shorter end of the curve increased.  10 year rates closed the month at 1.83%, unchanged from April month end.  Investment grade and high yield credit spreads were little changed in May (see page 13).
In commodities, the GSCI index was up 2.2% in May (see page 11), with gains in Energy (+4.6%), Livestock (+3.2%), and Agriculture (+1.3%), and losses in Industrial Metals (-7.1%) and Precious Metals (-6.3%).  Within individual commodities, Sugar (+7.2%), Heating Oil (+7.2%), and Live Cattle (+5.7%) saw the biggest gains, while Palladium, (-12.9%), Silver (-10.2%), and Platinum (-9.1%) saw the biggest losses.  Gold was down 5.8% in May.

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Monday, May 2, 2016

April 2016 - Monthly Market Commentary

April was a solid month for global risk assets.  Global equities continued to rally, the US Dollar weakened, commodities moved higher, credit spreads continued to grind lower, and the US interest rate curve was little changed.  At its April meeting, the Federal Reserve left interest rates unchanged and indicated that it was in no rush to raise rates at its next meeting in June.  The ECB also left rates unchanged at its April meeting, and indicated that rates would remain at current or lower levels for an extended period.  US GDP growth slowed to 0.5% in the first quarter, as global headwinds and market volatility negatively impacted the US expansion.  The Eurozone economy, meanwhile, grew at a 2.2% annualized pace in the first quarter, while China reported 6.7% growth.  The US job report showed 215,000 jobs were added in March, while the unemployment rate ticked higher to 5% and the labor force participation rate moved higher to 63%. 
Notable corporate transactions announced in April included the $2.6 billion acquisition of Virgin America by Alaska Air Group, Gilead Sciences’ acquisition of Nimbus Apollo for $400 million plus up to $800 million in additional payments, Glencore’s sale of 40% of its agricultural business to CPPIB for $2.5 billion, Brocade’s $1.2 billion purchase of Ruckus Wireless, the $1 billion investment in Lazada Group by Alibaba Group, the $1.25 billion investment in Ele.me by Alibaba Group and Ant Financial, the $2.9 billion purchase of Anheuser-Busch InBev’s Peroni and Grolsch brands by Asahi Group, the $3.6 billion acquisition of Lexmark by Apex Technology and PAG Asia Capital, the $710 million purchase of Safran’s Morpho Detection unit by the Smiths Group, Abbott Laboratories’ $25 billion acquisition of St. Jude Medical, and Comcast’s $3.8 billion purchase of DreamWorks Animation.
Developed market equity markets were mostly higher in April (see page 8) led by Spain (+4.6%), Australia (+3.7%), and Canada (+3.3%).  US small caps outperformed large caps, with the Russell 2000 up 1.6% and the S&P 500 up 0.4% (see page 2).  Energy (+8.7%), Materials (+4.9%), and Financials (+3.4%), were the best performing sectors in April, while IT (-5.4%), Utilities (-2.4%), and Telecom (-2.1%) were the worst performing (see page 2).  Large cap value (+2.1%) outperformed large cap growth (-0.9%) in April (see page 3).  Emerging Market equities were mixed in April (see page 9), with the biggest gains in Brazil (+7.5%), Russia (+4.9%), and Argentina (+4%); Taiwan (-5.1%), Malaysia (-2.4%), and Indonesia (-1.7%) were the worst performing. 
In currencies, the USD Index weakened 1.6% in April (see page 10).  The strongest developed market currencies against the USD were the Japanese Yen (+5.9%), Canadian Dollar (+3.6%), and Norwegian Krone (+2.7%); the Australian Dollar weakened -0.7% against the USD.  The USD was mixed against emerging market currencies with the biggest gains seen by the Brazilian Real (+4.6%), South African Rand (+3.8%), and Russian Ruble (+3.5%); the biggest losses against the USD were seen by the Malaysian Ringgit (-0.8%), Indonesian Rupiah (-0.5%), and Chinese Yuan (-0.4%) (see page 10).
The US Treasury yield curve was little changed in April (see page 12).  10 year rates closed the month at 1.83%, up slightly from 1.77% at March month end.  Investment grade and high yield credit spreads tightened in April (see page 13).
In commodities, the GSCI index was up 10.1% in April (see page 11), with gains in Energy (+15.1%), Industrial Metals (+7.2%), Agriculture (+6.6%), and Precious Metals (+5.6%) and losses in Livestock (-5%).  Within individual commodities, Brent Crude (+17.3%), Crude Oil (+16.1%), and Heating Oil (+15.9%) saw the biggest gains, while Feeder Cattle (-10.2%), Live Cattle (-7.3%), and Coffee (-6.1%) saw the biggest losses.  Gold was up 4.5% in April.

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Friday, April 1, 2016

March 2016 - Monthly Market Commentary

March was a very strong month for global risk assets.  Global equities rallied sharply, the US Dollar weakened, commodities moved higher, credit spreads tightened, and the US interest rate curve steepened.  At its March meeting, the Federal Reserve left interest rates unchanged and reduced the expectation of its 2016 rate increases from four to two.  Federal Reserve Chair Yellen further stoked the risk rally near month end with a speech at the Economic Club of New York where she indicated that it is appropriate for the central bank to proceed cautiously in adjusting policy.  Earlier in the month, the ECB also boosted global risk appetite by cutting rates and expanding its asset purchase program.  China, meanwhile, lowered its 2016 economic growth target to a range of 6.5% - 7%.  The US job report showed 242,000 jobs were added in February, while the unemployment rate remained at 4.9% and the labor force participation rate moved higher to 62.9%. 
Notable corporate transactions announced in March included the $260 million acquisition of CliQr and the $380 million acquisition of Leaba Semiconductor by Cisco, China Resources Beer’s $1.6 billion purchase of SABMiller’s 49% interest in its Chinese beer business, Samsonite’s $1.8 billion acquisition of Tumi, AMC Entertainment’s $1.1 billion purchase of Carmike Cinemas, the $3.05 billion acquisition of Dell’s Perot Systems business by NTT Data, Intel’s $175 million acquisition of Replay Technologies, GM’s acquisition of self-driving software firm Cruise Automation for an undisclosed amount, the $1.36 billion take private transaction of Fresh Market by Apollo Global, Davide Campari-Milano’s $759 million purchase of Societe des Produits Marnier Lapostolle, the $30 billion merger of the London Stock Exchange and Deutsche Borse, the $6.2 billion sale of Toshiba’s medical and consumer electronics business to Canon, Coherent’s $942 million acquisition of Rofin-Sinar, TransCanada’s $10.2 billion purchase of Columbia Pipeline Group, IBM’s purchase of Optevia and the Bluewolf Group for undisclosed amounts, Sherwin Williams’ $9 billion acquisition of Valspar, the $13 billion merger of IHS and Markit, the $13.6 billion acquisition of Starwood Hotels by Marriott, Foxconn’s $3.5 billion purchase of Sharp, and State Street’s $485 million purchase of GE’s Asset Management business.
Developed market equity markets were sharply higher in March (see page 8) led by Hong Kong (+9.5%), the S&P500 (+6.7%), and Canada (+5%).  US small caps outperformed large caps, with the Russell 2000 up 8% (see page 2).  Energy (+9.3%), IT (+9.2%), and Utilities (+8%), were the best performing sectors in March, while Healthcare (+2.8%), Consumer Staples (+4.8%), and Telecom (+6.4%) were the worst performing (see page 2).  Large cap value (+7.2%) outperformed large cap growth (+6.7%) in March (see page 3).  Emerging Market equities were also sharply higher in March (see page 9), with the biggest gains in Brazil (+16.2%), China (+11.7%), and India (+9.4%); Argentina (-3.5%), Indonesia (+2.3%), and Russia (+4.4%) were the worst performing. 
In currencies, the USD Index weakened 3.7% in March (see page 10).  The strongest developed market currencies against the USD were the Australian Dollar (+7.2%), Swedish Krona (+5.5%), and Norwegian Krone (+5.1%).  The USD also weakened against emerging market currencies with the biggest gains seen by the Brazilian Real (+11.9%), Russian Ruble (+11.3%), and Malaysian Ringgit (+8.4%) (see page 10).
The US Treasury yield curve steepened in March (see page 12) as short term rates fell and long term rates were little changed.  10 year rates closed the month at 1.77%, up slightly from 1.74% at February month end.  Investment grade and high yield credit spreads tightened in March (see page 13).
In commodities, the GSCI index was up 4.9% in March (see page 11), with gains in Energy (+8.3%), Agriculture (+3.4%), Precious Metals (+0.4%), and Industrial Metals (+0.1%) and losses in Livestock (-1.4%).  Within individual commodities, Palladium (+13.8%), Coffee (+10.8%), and Natural Gas (+8.7%) saw the biggest gains, while Aluminum (-3.8%), Feeder Cattle (-2.1%), and Live Cattle (-1.9%) saw the biggest losses.
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Tuesday, March 1, 2016

February 2016 - Monthly Market Commentary

February was a mixed month for global risk assets.  Developed market equities were mostly lower, emerging market equities were mostly higher, the US Dollar was weaker against most developed market currencies and was mixed against emerging market currencies, energy commodities were sharply lower, and the US interest rate curve flattened.  At her February congressional testimony, Chairwoman Yellen suggested that the balance of risks facing the US economy had deteriorated, leading most observers to conclude that a March interest rate hike was off the table.  In Europe, headline inflation fell to -0.2% in February, raising expectations for another round of policy easing from the ECB in March.  The US job report showed 151,000 jobs were added in January, while the unemployment rate fell to 4.9% and the labor force participation rate ticked slightly higher to 62.7%. 
Notable corporate transactions announced in February included the $4.4 billion acquisition of Questar by Dominion Resources, IBM’s purchase of Aperto and Resilient Systems for undisclosed amounts and Truven Health Analytics for $2.6 billion, Abbott Lab’s $5.8 billion acquisition of Alere, China National Chemical’s $43 billion purchase of Syngenta, the $1.4 billion acquisition of Jasper Technologies by Cisco, Groupe Casino’s sale of a 58.6% stake in Thai hypermarket operator Big C Supercenter to the TCC Group for 3.1 billion euros, the $1.1 billion take private transaction of Apollo Education by an investor group including the Vistria Group and Apollo Global, Mylan’s $7.2 billion purchase of Meda, ADT’s $6.9 billion acquisition by Apollo Global, Tianjin Tianhai Investment’s $6 billion purchase of Ingram Micro, Verizon’s $1.8 billion acquisition of XO Communications’ fiber-optic network business, and Sysco’s $3.1 billion purchase of the Brakes Group.
Developed market equity markets were mostly lower in February (see page 8) as Japan (-9.3%), Italy (-5.6%), and Spain (-4%) had the biggest losses, while the UK (+0.9%) gained.  US small caps performed roughly in line with large caps, with the Russell 2000 flat on the month and the S&P500 down 0.1% (see page 2).  Materials (+7.6%), Industrials (+4%), and Telecom (+2.7%), were the best performing sectors in February, while Financials (-2.9%), Energy (-1.9%), and IT (-1.2%) were the worst performing (see page 2).  Large cap growth and large cap value were both flat in February (see page 3).  Emerging Market equities were mostly higher in February (see page 9), with the biggest gains in Argentina (+8.3%), Brazil (+5.2%), Thailand (+4.2%); India (-6.7%), China (-2.6%), and Malaysia (-0.8%) were the worst performing. 
In currencies, the USD Index weakened 1.4% in February (see page 10).  The strongest developed market currencies against the USD were the Japanese Yen (+7.5%), Canadian Dollar (+3.2%), and Swiss Franc (+2.5%), while the British Pound (-2.3%) and Norwegian Krone (-0.2%) weakened against the USD.  The USD was mixed against emerging market currencies with the biggest gains seen against the Korean Won (-2.5%), Malaysian Ringgit (-1.6%), and Indian Rupee (-0.5%); the Indonesian Rupiah (+2.3%), Russian Ruble (+1.5%), and Singapore Dollar (+1.2%) strengthened against the USD (see page 10).
The US Treasury yield curve flattened in February (see page 12) as short term rates rose and long term rates fell.  10 year rates closed the month at 1.74%, down from 1.94% at January month end.  By month end, investment grade and high yield credit spreads recovered most of their mid-month widening (see page 13).
In commodities, the GSCI index was down 2% in February (see page 11), with losses in Energy (-4.5%) and Agriculture (-3.3%); gains were seen in Livestock (+1.2%), Industrial Metals (+3.4%), and Precious Metals (+10%).  Within individual commodities, Gold (+10.6%), Sugar (+9.9%), and Platinum (+6.9%) saw the biggest gains, while Natural Gas (-27.7%), Cotton (-8.4%), and Crude Oil (-6.4%) saw the biggest losses.
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Monday, February 1, 2016

January 2016 - Monthly Market Commentary

January 2016 - Monthly Market Commentary
January was a difficult month for global risk assets.  Developed and emerging market equities were mostly lower, in many countries sharply so, the US Dollar strengthened, the oil complex was sharply lower while other commodities were mixed, credit spreads widened, and US interest rates tightened except at the very short end of the curve.  At its January meeting, the Federal Reserve made no change to interest rates and indicated that they are monitoring recent economic and financial market weakness, leading many to conclude that the pace of future interest rate increases will slow.  At month end, the US GDP report showed that the US economy grew at only a 0.7% annualized rate in the fourth quarter and 2.4% for 2015.  Also at month end came an unexpected move from the Bank of Japan, which introduced negative interest rates for the first time.  The US job report showed 292,000 jobs were added in December (bringing 2015 new jobs to 2.7 million), while the unemployment rate was unchanged at 5.0% and the labor force participation rate ticked slightly higher to 62.6%. 
Notable corporate transactions announced in January included the $32 billion acquisition of Baxalta by Shire, Haier’s $5.4 billion purchase of the GE’s appliance business, Suncor’s $2.9 billion acquisition of Canadian Oil Sands, IBM’s purchase of Ustream and Resource/Ammirati (terms undisclosed), the merger of the Redwood Group and e-Shang, two Asian based real estate firms, the $585 million acquisition of Clarion by Legg Mason, the $14 billion merger of Johnson Controls and Tyco International, AIG’s reorganization and spin-off of its mortgage insurance unit and sale of its financial advisory business, the purchase of FirstMerit by Huntingon Bancshares for $3.4 billion, and the split by Xerox into two publicly traded companies.
Developed market equity markets were lower in January (see page 8) as Italy (-13.2%), Hong Kong (-8.9%), and Germany (-8.6%) had the biggest losses.  US small caps underperformed, with the Russell 2000 down 8.8% and the S&P500 down 5% (see page 2).  Telecom (+6.8%), Utilities (+4.9%), and Consumer Staples (+0.6%), were the best performing sectors in January, while Materials (-10.6%), Financials (-8.9%), and Healthcare (-7.6%) were the worst performing (see page 2).  Large cap growth (-5.6%) underperformed large cap value (-5.2%) in January (see page 3).  Emerging Market equities were mostly lower in January (see page 9), with the biggest gains in Argentina (+3.6%), Thailand (+3.4%), and Russia (+1.7%); China (-12.4%), Brazil (-5.8%), and India (-4.5%) were the worst performing. 
In currencies, the USD Index strengthened 1% in January (see page 10).  The weakest developed market currencies against the USD were the New Zealand Dollar (-5.1%), British Pound (-3.3%), and Australian Dollar (-2.8%), while the Norwegian Krone (+1.9%) strengthened against the USD.  The USD was stronger against most emerging market currencies with the biggest gains seen against the Mexican Peso (-5%), Russian Ruble (-3.6%), and South African Rand (-2.6%); the Malaysian Ringgit (+3.9%), Indonesian Rupiah (+1.4%), and Thai Baht (+0.9%) strengthened against the USD (see page 10).
The US Treasury yield curve flattened in January (see page 12) as short term rates rose and long term rates fell.  10 year rates closed the month at 1.94%, down from 2.27% at December month end.  Investment grade and high yield credit spreads widened in January (see page 13).
In commodities, the GSCI index was down 5.2% in January (see page 11), with losses in Energy (-9.2%), Industrial Metals (-1.6%), and Agriculture (-1%); gains were seen in Precious Metals (+5.1%) and Livestock was flat.  Within individual commodities, Lean Hogs (+8.5%), Gold (+5.3%), and Corn (+3.7%) saw the biggest gains, while Cocoa (-14%), Sugar (-13.8%), and Gasoline (-13.1%) saw the biggest losses; Gold was up 5.3%.

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Friday, January 1, 2016

December 2015 - Monthly Market Commentary

December was a mixed month for global risk assets.  Developed and emerging market equities were mostly lower, the US Dollar strengthened against emerging market currencies, but weakened against the Euro and Yen, commodities were mixed, credit spreads widened, and US interest rates increased.  The big macroeconomic headline for the month was the Federal Reserve’s first interest rate increase in nine years, ending seven years with a target funds rate of zero percent.  In Europe, the ECB disappointed markets with a cut in the deposit rate and a six month extension of the existing quantitative easing program.  The US job report showed 211,000 jobs were added in November, while the unemployment rate was unchanged at 5.0% and the labor force participation rate ticked slightly higher to 62.5%. 
Notable corporate transactions announced in December included the $13.9 billion acquisition of Keurig Green Mountain by an investor group led by JAB Holding, Alibaba’s purchase of the South China Morning Post for $266 million, the $130 billion merger and subsequent three way breakup of DuPont and Dow Chemical, Newell Rubbermaid’s $15 billion acquisition of Jarden, Cerberus Capital’s $605 million deal to buy 80% of Avon Products’ North American business and a 17% stake in the company, the $1 billion purchase of Pep Boys by Icahn Enterprises, and Singha Asia’s $1.1 billion deal to buy 25% of Masan Consumer Holdings and 33.3% of Masan Brewery. 
Developed market equity markets were mostly lower in December (see page 8) as Australia (+2.6%) and Hong Kong (+0.8%) gained, while Spain (-8.3%), Italy (-6.1%), and France (-6%) saw the biggest losses.  US small caps underperformed, with the Russell 2000 down 5% and the S&P500 down 1.6% (see page 2).  Consumer Staples (+2.9%), Utilities (+2.2%), and Healthcare (+1.8%) were the best performing sectors in December, while Energy (-9.9%), Materials (-4.2%), and Consumer Discretionary (-2.8%) were the worst performing (see page 2).  Large cap growth (-1.5%) outperformed large cap value (-2.2%) in December (see page 3).  Emerging Market equities were mostly lower in December (see page 9), with the biggest gains in Indonesia (+4.7%), India (+1.7%), and Malaysia (+1.4%); Thailand (-7.3%), Brazil (-4.2%), and Argentina (-3.8%) were the worst performing. 
In currencies, the USD Index weakened 1.5% in December (see page 10).  The weakest developed market currencies against the USD were the Canadian Dollar (-3.4%), British Pound (-2.1%), and Norwegian Krone (-1.7%), while the New Zealand Dollar (+3.8%), Swedish Krona (+3.3%), and Euro (+2.8%) strengthened the most against the USD.  The USD was stronger against most emerging market currencies with the biggest gains seen against the Russian Ruble (-9%), South African Rand (-6.6%), and Mexican Peso (-3.7%); the Indian Rupee (+0.5%) strengthened against the USD (see page 10).
US Treasury yields rose in December (see page 12) across the curve.  10 year rates closed the month at 2.27%, up from 2.21% at November month end.  Investment grade and high yield credit spreads widened in December (see page 13).
In commodities, the GSCI index was down 8.6% in December (see page 11), with losses in Energy (-15.3%), Agriculture (-1.2%), and Precious Metals (-0.6%); gains were seen in Livestock (+3.7%) and Industrial Metals (+3.3%).  Within individual commodities, Platinum (+7.2%), Coffee (+5.9%), and Lean Hogs (+5.3%) saw the biggest gains, while Heating Oil (-18.9%), Brent Crude (-18%), and Crude Oil (-14.7%) saw the biggest losses; Gold was down 0.5%.
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