Halister News

(Bloomberg) -- Prudential Plc’s Asian asset management unit, which profited from the rebound in 30-year Treasuries last month, has taken its money off the table with the view the three-week rally in U.S. government debt is coming to an end.

• Nicholas Ferres, who oversees multi-asset investments at Eastspring Investments in Singapore, unwound his holdings of 30-year bonds Friday and Monday, selling them at yields as low as 2.96%, after U.S. jobs and wage data
  • He bought those securities at levels above 3.10% last month when the Fed raised rates
• “There is a risk that the Fed is behind the curve or has to tighten policy more aggressively than expected now. The odds are yields will move higher”: Ferres
• Expects dollar to strengthen past parity against the euro and reach 130 yen if traders start factoring in quicker Fed hikes
  • Warns betting on dollar strength is a “crowded trade”
• Prefers emerging-market currencies and equities which offer more attractive valuations and will benefit from improving global growth
  • Many developing-nation currencies are undervalued, while those of Brazil, Indonesia, Russia, Peru and Mexico have “positive carry” even after adjusting for inflation expectations
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