Hedge Funds Shift From Safe Havens Ahead of U.S.-Iran Peace Agreement Signing on Friday

A U.S.-Iran peace agreement is set to be formally signed on Friday, prompting hedge funds to move away from safe-haven assets and reposition into oversold Asian equities, U.S. Treasuries, and consumer-related sectors. According to Odaily, global hedge fund managers are revisiting pre-war trading approaches in an effort to capture what they see as an initial premium following easing inflation. In bond markets, hedge funds are actively trading around expectations of a more hawkish shift by the U.S. Federal Reserve. Florida-based Grey Value Management and Singapore-based Reed Capital both favor short-dated U.S. Treasuries. The report said analysts attribute the shift to falling oil prices, which have eased cost-driven inflation pressures, leading traders to reduce bets on further Fed rate hikes. It added that the two-year U.S. Treasury yield has declined notably, and that the release of its safe-haven premium relative to longer-dated bonds is viewed as offering more stable allocation value.