Monthly Hedge Fund Trends – January 2014 (Deutsche Bank)

January 2014

KEYWORDS: asset allocation, Global, Survey, assets under management, European Union, regulatory requirements, CTA, managed futures, commodity trading advisor, long/short equity, distressed debt, Japan, United Kingdom, Federal Reserve Board, CFTC, Commodity Futures Trading Commission, AIFMD, Volcker Rule, cross-border swaps, OTC derivatives, FATCA, Hedge Fund Performance, European Central Bank, Institutional Investors, leverage, Volatility, Quantitative, quantitative easing, UCITS

Authors:

Deutsche Bank

Organizations:
  • Deutsche Bank

Summary:
In our first piece, the research team comments on the dovish rhetoric from the ECB this month and presents the European case for quantitative easing. With the need to keep inflation expectations in line with price stability, the team finds that GDP-weighted purchases are probably more consistent with the spirit of the European Treaty than the country-specific OMT that blurs the boundaries of monetary financing. In the team’s view, significantly lowering yields on government bonds is the most efficient and least disruptive way to incentivize banks to lend to the private sector again.
In our second piece, the research team finds that the December US employment report was out of line with the recent labor trend. The team outlines several of the potential distortions in the data and highlights that the 3-month average on payrolls remains healthy. The team does not believe that the December employment data will impact the QE-tapering process.

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