Special Situations strategies have been under pressure in 2020, both on their event and credit arbitrage books. Due to their long structural market beta, managers have underperformed early this year. They have retraced most but not all they have lost.

Since the U.S. presidential election on November 3 th, the USD has started a descent that may have legs under the new administration. The easing of trade tensions and an accommodative policy mix could put additional pressure on the DXY, which was down -1.7% since the election, to the benefit of European currencies.

Several hedge fund strategies have momentum biases, in particular L/S Equity, and CTAs. Considering the fact that this rotation took place in a bullish environment, most hedge fund strategies ended the week in positive territory.