CTA Trading Specialists – March 2018

The main theme for the month CTA trading specialist has been the introduction of the US protectionist stance. This began with formal tariffs on steel and aluminium imports into the United States. Exemptions to these initial tariffs granted to neighbouring countries Canada and Mexico, as trade talks were in motion. As expected the consequence of these actions led to retaliatory measures from existing trading partners. It is unclear on how these actions will impact the US; however the data supports a solid first quarter.

In Asian news it was China’s proposal to end the existing two-term limit for the country’s leaders, which took headlines. The result of this action would see the possibility for China’s leaders to remain in power indefinitely. It was the speculation of the impending US trade policy, that dominated international headlines instead. Therefore, the rotation on China’s leadership played less scrutiny in the Western media than was expected. Both politically charged moves are significant to the growth and direction of the global economies and CTA trading specialist strategies.

Slowing Growth in Europe

For the first time in many months the growth indicators in Europe have dipped. As leading economic indicators fell from multi-year highs, this can be seen as a pause in economic momentum. Within in the Eurozone members the headline inflation has remained soft. This has opened the options for an ECB dovish stance on monetary policy. Without placing too much emphasis on last month’s data the numbers point towards a dip in growth.

The news in Europe however was not only centred on the economic data. Uncertainty is developing on the political scene and Brexit negotiations are at odds over key issues. Anti-establishment movement still remains strong in Europe. The expected inconclusive outcomes of the Italian elections, is an example of this political undertone. In Germany however the political environment was more stable. Through a coalition the leading political group was finally able to form a government since the election. Consequently, a result of these elections can see Germany’s stance as the Eurozone pre-eminent member be diminished.

Impact on CTA Trading Specialist Programs

Despite the economic data show broadly resilient economic around the globe, the first quarter was a disappointment to investors. Breaking down the different components of the multiple CTA trading specialist strategies revealed a volatile initial quarter. This created uncertainty following a year that saw calmer market conditions which rallied steadily on news and corporate growth. However, this is somewhat unsurprising considering the increased risks coming to the markets. With the impending trade wars, there is the possibility of inflationary pressures as well as political uncertainty. In summary, a reversal of last year’s optimal scenario of synchronised global expansion.

Choosing the appropriate CTA trading specialist investment under adverse market conditions is ever more challenging. Equity markets have capitalised on the gains driven by the last year’s global expansion. Despite the fact that growth remains intact and quite robust, a scenario points to the final stages of the bull market run. Rising commodity prices generally go hand-in-hand with increasing production and manufacturing costs. A slowdown in global manufacturing output could be the catalyst to changing market conditions. The important factor here is to align trading strategies towards the possibility of these shifting markets.