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Stronger Dollar Offsets Challenging Trend-Following Environment

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The NHX CTA Index, tracking Nordic managers employing managed futures, trend-following, and systematic macro strategies, gained 0.6 percent in June, lifting its return for the first half of 2026 to 6.1 percent. Performance varied across managers and sub-strategies, with gains driven primarily by a strengthening U.S. dollar as the Federal Reserve kept a surprisingly hawkish stance.

Last month, time-series momentum (TSMOM) conditions, as measured by RPM’s Market Divergence Index (MDI), settled below their long-term average as many financial market trends reversed. In equities, stocks fell and the VIX surged amid concerns about rising U.S. interest rates and the longevity of the AI boom. Nevertheless, U.S. stocks capped their best quarter since 2020. In fixed income, a much stronger-than-expected U.S. jobs report fueled speculation that the Fed would raise interest rates later this year, causing U.S. bond yields to rise sharply.

In FX, the U.S. dollar continued to appreciate, particularly against the Japanese yen, supported by the hawkish tone adopted by the new Federal Reserve Chair at his first FOMC meeting. In commodities, oil prices fell almost 20 percent, marking their largest monthly decline since 2020, amid hopes that a deal between the U.S. and Iran would soon lead to the reopening of the crucial Strait of Hormuz. Gold extended its losses as investors continued to respond to the more hawkish tone from Fed officials. Elsewhere, global wheat markets declined amid ample seasonal supplies and a broad reduction in geopolitical risk premiums, effectively erasing the rally seen in May.

Sub-Strategies and Constituents in the NHX CTA Index

Most Nordic trend followers ended the month in positive territory. Calculo Altus, Lynx, Mandatum Managed Futures, and SEB Asset Selection all posted gains, primarily driven by gains in stock indices and FX market. Estlander & Partners Alpha Trend was the exception, ending the month in negative territory as losses in commodities outweighed gains in financials.

Performance among non-trend-following managers was mixed. Within short-term trading strategies, Lynx Constellation generated positive returns on the back of gains in currencies, while Epoque ended the month in negative territory, mainly due to losses in metals and energy markets. Among global macro managers, Estlander & Partners Freedom and Lynx Systematic Macro both posted negative returns, whereas Volt Diversified Alpha delivered strong gains, largely driven by profits in currency markets. The multi-manager program RPM Evolving CTA Fund also finished the month higher, supported by positive contributions from its underlying managers’ profits in the FX sector.

Outlook

The macroeconomic outlook has improved following the rapprochement between the U.S. and Iran. However, stronger-than-expected U.S. economic data have made interest rate cuts this year increasingly unlikely. At the same time, growing doubts about the sustainability of the AI-driven rally are weighing on investor sentiment. It remains too early to determine whether this marks the end of the current bull market and the beginning of a more bearish environment, or simply a temporary pause in the ongoing rally.

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Alexander Mende
Alexander Mende
In 2025, Alexander Mende, PhD., became the Chief Investment Officer at RPM Risk & Portfolio Management AB. RPM is an investment manager providing customized multi-manager solutions in Managed Futures strategies based on managed account platforms. RPM has been active in the Managed Futures space since 1993 serving clients primarily in Asia and Central Europe and is located in Stockholm, Sweden. Alexander attained his doctorate (PhD) in economics at the University of Hanover, Germany, before joining RPM back in 2005. His research interests include the areas of FX trading, international finance, portfolio management, and alternative investments, in particular managed futures and trend following.

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