Asset Allocation for March 2018

February 2018th was tinged with volatility surge on the stock market, changes of the leadership of US Federal Reserve and agricultural commodities assets rise.

US FED interest rate growth estimates from current 1.50% to 2.35% by the end of 2018 caused treasuries selloff. 10-year yields came close to 3% level. This is a psychological figure for investors exceeding of which could lead to sharp correction in equities.

S&P500 index showed its fragility in the early February amid aggressive FED policy. Strategically we recommend you to abstain from entering long term positions on the US stock market. Tactically it is a favorable macroeconomic momentum in US for speculative buying of fundamentally strong sectors.

As we’ve forecasted earlier this year it’s a start of commodities cycle rebound. During January-February corn and wheat prices grew by 11% and 19% respectively. Traders are concerned about weather conditions in South America and possible quotes on agricultural imports in USA.

Threat and challenges in world markets:
 - Monetary policy tightening by US FED
 - Mifid II implementation by European banks
 - Donald Trump’s protectionist government policy

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