Macro drives trades

Over the last few years, drivers of financial markets movements have switched to more macro-centric as central bank activity dominated trading themes.

US Trader
Source: Bloomberg

The performance of the equity markets reflected the two main themes last year. Energy and resources, along with financials and utilities ended 2015 in losses. The first bunch was really killed by the collapse in commodity prices, associated with a China growth slowdown. The second group was affected by the anticipation of the US interest rate hike lift-off, as well as continued struggle in global banks.

Sovereign debt yields were pulled higher in general, with a bout of volatility in the first half of the year, as the crowded yield trade experienced a large unwinding of positions. Yields on 10-year US treasuries rose 4.5% or 10 basis points, from 2.171 to 2.269, while those of 10-year German bunds surged 16.8% or 9 basis points, from 0.536 to 0.626. The latter soared as high as almost 1.00 or over 80% when the one-way bet on government bonds unravelled in late April.

The currency market was an interesting one, and was dictated by the rise in the US dollar, as market players bet on higher US rates through the year. The strengthening greenback also posed a problem for the commodity complex, where many were priced in USD, and added pressure to the sector.

The trade-weighted real broad dollar rose 8.8% in 2015. The dollar index rallied 9.3% from around 90 to 98-99 by year end, seemingly unable to sustain gains past the pivotal 100 mark.

The failure to maintain above 100 is significant, as it suggests that the dollar rally is running out of steam because the rate-hike moves have been priced in. Tellingly, in the last two years, the dollar index had gained 22% from around 80 to high-90s. In the preceding period from 2006-2013, the index ranged within 75-81.

In 2016, I feel that while the monetary policy divergence and commodity bust will continue to be the main themes for market participants, although the magnitude of moves may not be as large as in 2015. I think traders will be focused on the pace of global growth, as it will doubtlessly affect the policy decisions of major central banks and the commodity sector. This will in turn influence investment decisions.




  • S&P 500 fell -0.7% in 2015, dragged by financials, energy, industrials, materials and utilities. The index was propped by outperformance from information technology, health care, consumer discretionary and staples, pointing towards a greater confidence in private consumption. The 12-month moving average in the conference board consumer confidence index (seasonally adjusted) improved 12.8% from 86.9 to 98.0.


  • Euro Stoxx 600 rallied +6.8% last year, where gains were limited by losses in basic resources, oil & gas, utilities and banks. Sentiments in Europe were relatively buoyant, supported by the European Central Bank (ECB)’s quantitative easing programme, as most cyclical and defensive stocks were higher on the year. Out of those who made a yearly gain, only industrial goods & services, and chemicals underperformed the index. Many chalked up double-digit rallies.


  • The Bloomberg Commodity Index accelerated its decline in 2015 to -24.7%, extending to a fifth year of losses. Since 2010, the index had erased around half of its level, and also dropped to a 16-year low last year.


*For more timely quips, you may wish to follow me on twitter at

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.