| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
QCAM maintains a USD bearish outlook for 2026 while acknowledging significant two-way volatility risks. Global FX volatility has dropped to relatively low levels despite heightened geopolitical, policy, economic and market uncertainties, creating a disconnect visible across most asset classes. This disconnect may break in 2026, with FX implications varying by shock type. Geopolitical shocks affecting the global economy more than the US would likely support the USD, while shocks impacting primarily the US such as policy credibility events would probably hurt the dollar. The correlation between FX volatility and USD has turned essentially zero, implying movement could go either direction. QCAM's current positioning is moderately short USD with longs in EUR, CAD, CHF and JPY. Most central banks are expected to keep rates on hold, with main exceptions being Fed and BoE cuts and BoJ hikes. Key risks include geopolitical tensions, US policy uncertainty, and potential government shutdown.
Global FX volatility has declined significantly despite ongoing high uncertainties, creating a disconnect that may break in 2026 with two-way volatility risks for currencies depending on shock type.
QCAM maintains USD bearish outlook for 2026 but acknowledges risks are spread in several directions. The disconnect between low FX volatility and heightened uncertainty may break in 2026, with FX implications differing based on shock type. Geopolitical shocks likely USD friendly while US policy credibility shocks will probably hurt USD.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 8 2026 | 2025 Q4 | - | Central Banks, Dollar, FX, Geopolitical, rates, volatility | - | Global FX volatility has declined significantly despite ongoing high geopolitical, policy, economic and market uncertainties. The disconnect between market volatility and perceived risks is visible across most asset classes. Rising volatility can have two-dimensional FX effects depending on the nature of the shock. USD outlook remains bearish for 2026 but risks are spread in several directions. The correlation between FX volatility and USD has turned essentially zero, implying movement could go either direction. USD performance depends on whether shocks affect the global economy more than the US or impact primarily the US. Most central banks expected to keep rates on hold including ECB and SNB. Main exceptions are cuts from Fed and BoE and hikes from BoJ. US inflation expected to remain resilient due to residual tariff effects and tightening labor supply. |
| Oct 9 2025 | 2025 Q3 | - | Currency, Dollar, FX, inflation, interest rates | - | The letter highlights divergent monetary policy paths driving FX volatility. QCAM anticipates dollar weakness as US rates peak and global inflation moderates. They emphasize tactical positioning in euro and yen exposure while maintaining systematic hedging strategies. |
| Jul 3 2025 | 2025 Q2 | - | Currency, diversification, FX, Macro, real yields | - | The letter highlights currency markets as a source of diversification and alpha amid geopolitical shifts and divergent monetary policies. Management argues that valuation, balance of payments, and real yield differentials drive long-term currency returns. The strategy positions currencies as both return generators and risk mitigators. |
| Apr 3 2025 | 2025 Q1 | - | - | - | |
| Jan 9 2025 | 2024 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
DollarDollar depreciated -9% against trading partners in 2025, worst year since 2017. De-dollarization trend accelerating as world shifts away from US. Reduced net dollar exposure from 25% to 8% following geopolitical tensions and superpower positioning concerns. |
Depreciation De-dollarization Reserves Geopolitical |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
VolatilityMarket volatility in spring 2025 triggered by trade tariff uncertainty led to a broad sell-off, with strategies down over 23% year-to-date at the trough. The manager used this volatility to add exposure at attractive prices during the decline. |
Market volatility Sell-off Opportunity Exposure Timing | |
| 2025 Q3 |
Currencies |
|
DollarDollar depreciated -9% against trading partners in 2025, worst year since 2017. De-dollarization trend accelerating as world shifts away from US. Reduced net dollar exposure from 25% to 8% following geopolitical tensions and superpower positioning concerns. |
Depreciation De-dollarization Reserves Geopolitical | |
RatesFed cut rates by 25bps on December 10 while describing growth as moderate and inflation as still somewhat elevated. Markets took message as cut now, likely pause soon. The opportunity set was less about calling one Fed meeting and more about trading the path via rates and FX. |
Fed Easing Policy Duration Curve | |
| 2025 Q2 |
Currency |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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