Fund Managers See Dollar Rising and Treasury Notes Falling In Month Ahead

by Phillip Morton, Investors Offshore.com

05 August 2004

The publication on Monday of the Van Hedge Fund Advisors International monthly sentiment index has revealed that many fund managers have switched their previously bearish stance on the US dollar to a more positive outlook, whilst maintaining a bearish view of government bonds and a neutral outlook on equities for the month ahead.

The purpose of the indicators, published monthly on or about the fifth business day, is to reveal how fund managers believe the S&P 500, the US Dollar and the US Treasury 10-year Note will perform over the current month.

Based on the data, the group has changed their bearish stance on the US Dollar over the last two months and have become decidedly bullish for August. More than half of the managers (54%) expect the US Dollar to end the month higher. Only 20% were bullish of the dollar at the same time last month.

On the outlook for the US Treasury 10-year Note, the managers have become increasingly bearish. Half of the surveyed managers expect the see T-Notes lower by the end of August up from 28% who were bearish in June and 40% in July.

Finally, the managers continue to remain divided on their outlook for the S&P 500 with a slight bias towards rising equities in the month ahead. Certainly, the numbers anticipating a fall in the index has diminished and only 26% hold a bearish outlook for August, compared to 48% who were bearish two months ago.

The VAN Macro Sentiment Indicators are based on the outlook of hedge fund managers employing a macro view and who manage, in aggregate, in excess of $33 billion in assets.

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