Global ETF News Older than One Year
'Sticky' gold ETP investors holding on
April 12, 2012--Investors in gold exchange traded funds are living up to their reputation for "stickiness" as they have stuck with their holdings even as the price of bullion has retreated after hitting an all-time high in September 2011.
The price of gold has sunk by almost 14 per cent from its record $1,920.30 an ounce, breaking down through key support levels (100 and 200-day moving averages) and struggling to establish a solid floor.
Source: FT.com
Trade growth to slow in 2012 after strong deceleration in 2011
April 12, 2012--World trade expanded in 2011 by 5.0%, a sharp deceleration from the 2010 rebound of 13.8%, and growth will slow further still to 3.7% in 2012, WTO economists project. They attributed the slowdown to the global economy losing momentum due to a number of shocks, including the European sovereign debt crisis.
A significant braking of trade expansion had been forecast for 2011, but multiple economic setbacks during the year dampened growth beyond expectations and led to a stronger than anticipated easing in the fourth quarter.
"More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods," WTO Director General Pascal Lamy said.
“The WTO has so far deterred economic nationalism, but the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness. It is time to do no harm. WTO members should turn their attention to revitalizing the trading system and to ensuring such a scenario does not materialize.”
Source: WTO (World Trade Organization)
IMF Working paper-Financial Regulation and the Current Account
April 12, 2012--Summary: This paper examines the relationship between financial regulation and the current account in an intertemporal model of the current account where financial regulation affects the current account through liquidity constraints.
Greater liquidity constraints decrease the size and persistence of the current account response to a net output shock. The theory is tested with an interacted panel VAR model where the coefficients are allowed to vary with the degree of financial regulation. The current account reaction to an output shock is 60% larger and substantially more persistent in a country with low financial regulation than in one with high financial regulation.
view the IMF working paper-IMF Working paper-Financial Regulation and the Current Account
Source: IMF
BlackRock New Report: ETP Landscape Industry Highlights, Q1 2012
April 11, 2012--The first quarter of 2012 marked the best ever start to a year for the Exchange Traded Products (ETP) industry, according to BlackRock's latest ETP Landscape Report, as investors continued to return to the market and selected ETPs to invest in a range of asset classes.
The ETP industry gathered net new assets of $67.3bn during Q1 2012, representing an increase of 50% on Q4 2011 when net new assets stood at $44.8bn, and an increase of 57% on the $42.8bn of inflows recorded in Q1 2011.
Investor interest in fixed income ETPs also hit new highs during the quarter. Fixed income products attracted inflows of $19.5bn, eclipsing the previous quarterly record of $14.7bn set in Q4 2011, and accounted for 29% of all inflows into ETPs globally. Within the asset class, investors showed a clear preference for investment grade and high yield corporate bonds, with these two categories accounting for 85%, or $16.5bn of total fixed income inflows.
to request report Source: BlackRock
EU carbon law dealbreaker for climate talks
April 11, 2012--A European Union law that charges airlines for carbon emissions is "a dealbreaker" for global climate change talks, India's environment minister said, hardening her stance on a scheme that has drawn fierce opposition from non-EU governments.
From January 1 all airlines using EU airports have come under the European Union Emissions Trading Scheme (ETS).
US airlines have said they would grudgingly comply, but China has barred its carriers from participating unless they are given permission to do so and India has said it would boycott the scheme.
Source: FIN24
Climate Change: Sector Results Profile
April 11, 2012--Overview
Creating climate-resilient and low-carbon development paths has become a development imperative.
The World Bank continues to face unprecedented demand from many countries for support in their efforts to address development and climate change challenges. The World Bank has responded with a broad range of assistance through a combination of financial and other resources.
view the Development and Climate Action Reinforcing Synergies report
Source: World Bank
IMF Working paper-Money and Collateral
April 10, 2012--Between 1980 and before the recent crisis, the ratio of financial market debt to liquid assets rose exponentially in the U.S. (and in other financial markets), reflecting in part the greater use of securitized assets to collateralize borrowing.
The subsequent crisis has reduced the pool of assets considered acceptable as collateral, resulting in a liquidity shortage. When trying to address this, policy makers will need to consider concepts of liquidity besides the traditional metric of excess bank reserves and do more than merely substitute central bank money for collateral that currently remains highly liquid.
view IMF Working paper-Money and Collateral
Source: IMF
EU and US adopt blueprint for open and stable investment climates
April 10, 2012--EU Trade Commissioner Karel De Gucht and Deputy Assistant to the President of the United States Michael Froman agreed on an ambitious set of investment principles and openly invite other countries to follow suit. In the framework of the Transatlantic Economic Council (TEC), the EU and the US have developed a blueprint for creating and maintaining stable, predictable and transparent investment regimes.
The principles cover the elements which the EU and the US believe are necessary to attract long-term sustainable investment.
"Open investment markets generate growth and jobs – and these investment principles will support such an open investment climate," said EU Trade Commissioner Karel De Gucht. "It's another example of where the EU and the US are working together to keep trade and investment flowing worldwide. It shows that EU-US cooperation in the Transatlantic Economic Council delivers."
The Statement on Shared Principles for International Investment urges governments to maintain open, transparent and non-discriminatory investment climates. Simultaneously it confirms that governments can commit to a high level of investment protection and still maintain the right to regulate in order to pursue legitimate public policy objectives. In the view of the EU, such objectives include the environment, health, safety, labour or cultural diversity. The Statement also stresses that governments should not lower their standards, for example in relation to human rights or the environment, in order to attract foreign direct investment.
Source: Eurostat
China Merchants Securities (HK) Co., Ltd. Implements NASDAQ OMX's SMARTS Broker to Manage Equities Surveillance
April 9, 2012--China Merchants Securities (HK) Co, Ltd. ("CMS"), a wholly owned subsidiary of China Merchants Securities Co., Ltd ("China Merchants Securities"), has implemented NASDAQ OMX's SMARTS Broker solution for surveillance and compliance monitoring of its equities trading activity.
CMS' compliance team will use the SMARTS Broker solution to enhance surveillance capabilities in monitoring both client and employee trading for abuse across disparate trading systems. Easy to deploy as a hosted solution, SMARTS Broker helps satisfy CMS' need for more robust surveillance capabilities. CMS will utilize the automated trade monitoring solution to facilitate quick identification of suspicious trading behavior and intuitive detection of potential market manipulation. SMARTS Broker will provide CMS compliance professionals with actionable insight and sophisticated alerts for insider trading, market manipulation, and violations of order handling rules, watch lists and restricted lists.
Source: NASDAQ OMX
Dubai Gold & Commodities Exchange Weekly Market Commentary
April 8, 2012--Economic Data Overview
There have been two diverging themes in the market, these are the strengthening US economic recovery and continued crisis of confidence in European debt markets.
This week saw the release of Federal Reserve minutes recording a large majority opposed to QE3. A decision we see as clear evidence, that the chance of another round of quantitative easing, ever, is very unlikely. This vote is completely at odds with the dovish tone used by Ben Bernanke in recent press conferences. Gold has been battered by the news and the dollar has rallied three big figures against the euro. Federal Reserve Regional Presidents have been stressing the threat of inflation, as economic confidence becomes more established. Interest rate futures are pricing in a quarter point hike in Fed funds between September and December 2013. This is a year ahead of the forecast made by the Federal Reserve. Ten year bond yields are above 2.0%, strengthening a base reached in September 2011. If, as we suspect, all the inflation risks are on the upside then it is very difficult to add to long bond positions at current levels. Our view is supported by the limited flight to quality in US bonds this week, even with the renewed panic in European debt markets.
The other part of the optimistic US outlook has been the strong performance by the major stock market indices. Since November 2011 equities have rallied sharply. While the market has traded sideways over the past three weeks in a jagged ranging pattern, losses have been limited. The S&P 500 is currently trading at the highest levels since 2008. This is a strong endorsement of the better economic outlook emerging in 2012.
The negative news has all been coming out of Europe. All asset classes in the euro bloc are back on a crisis footing. The need to reduce the Spanish budget deficit in line with EC pressure has seen massive austerity measures proposed. This medicine is proving difficult for investors to stomach as they believe it will be very hard for Spain to fund its deficit with such huge cuts in spending and increased taxes. Unlike Greece Spain is a not a minor player, it is the fourth largest economy in Europe. Spanish unemployment is above 20% and youth unemployment is 50%. The yield on Spanish bonds ballooned again this week as an auction of their bonds was barely covered. The cost of Spanish credit default swaps has also risen sharply. The calm following the deal on the Greece private sector debt has now passed and all investors exposed to Europe are looking for safe havens.
German bond yield have fallen rapidly and currency flows back in to the Swiss franc have pushed the market lower to test the 1.2000 SNB floor. Market sources claimed that the Swiss National Bank has 9 billion Swiss francs to sell at this level on Thursday, as authorities tried to limit the rise of the currency. Last year the entire intervention program is believed to have cost 17 billion Swiss francs.
So far this year the US economy created an additional 200,000 plus jobs, each month. Expectations are of a further 210,000 additional jobs in March, while the unemployment rate is due to remain unchanged at 8.3%. The market consensus is of an even higher jobs number than currently forecast after Thursday's 6000 fall in the weekly initial jobless claims. The weekly claims are now at the lowest level in four years.
Next week the market will look to a BOJ interest rate decision. No change is anticipated but comments will be watched closely for further reflation proposals. French CIP and US PPI are also on the calendar along with US CPI. Our bias is for stronger US data.
Source: Dubai Gold & Commodities Exchange (DGCX)
