Global ETF News Older than One Year
China reduced U.S. Treasury holdings last year
March 1, 2012--China, the largest foreign holder of U.S. government debt, reduced its holdings of federal securities last year, according to revised data released Wednesday by the Treasury Department.
China’s holdings fell to $1.15 trillion at the end of last year from $1.16 trillion at the end of 2010. It reached a high of $1.31 trillion in July.
The drop suggests China could be diversifying its stock of $3.2 trillion in foreign reserves compiled through years of trade surpluses.
Source: Los Angeles Times
"Rare Earth Element ETF Could Make Investing In Rare Earths Lucrative" The Absolute Wealth Newsletter Published Today
To provide information on rare earth metals, the Absolute Wealth newsletter published "Rare Earth Element ETF Could Make Investing In Rare Earths Lucrative" today.
February 29, 2012-To provide rare earth mineral information, the Absolute Wealth newsletter published the "Rare Earth Element ETF Could Make Investing In Rare Earths Lucrative" article today.
The Absolute Wealth newsletter reveals, that investors have been taking a second look at rare earth element ETF for investing in rare earths. The Absolute Wealth newsletter reports that the top 3 rare earth metals currently are Cerium, Neodymium, and Gadolinium.
Cerium is actually the 25th most abundant element in the Earth’s crust, the newsletter explains, having 68 parts per million. The Absolute Wealth newsletter says that it is roughly as abundant as copper and could feasibly find itself traded individually on global commodity exchanges if adequate supply lines were secured. Commercial applications of cerium are numerous, which the Absolute Wealth newsletter says include catalysts, additives to fuel to reduce emissions and to glass and enamels to change their color.
Source: PR Web
Deutsche Bank Chooses Guggenheim for Asset Management Talks
February 29, 2012--Deutsche Bank AG said it is holding exclusive talks to sell its asset-management divisions to the U.S. money manager Guggenheim Partners LLC.
The sale negotiations apply to the four businesses that the Frankfurt-based bank put under review, including DWS mutual funds in the Americas, the advisory units for institutional investors and insurance firms, and its RREEF real-estate and infrastructure division, the firm said in a Business Wire statement today.
Source: SF Gate
Price Formation on the CDS Market: Lessons of the Sovereign Debt Crisis (2010-)
February 29, 2012--ABSTRACT
Further to recent trends in CDS prices and sovereign bond yields, this memo looks into the subject of price
formation on CDS markets, notably on sovereign issuers. Interviews were conducted on this subject with
operators on these markets.
Operators agreed that for Germany and the United States, recent CDS market trends have had no impact on the financing costs of these States. This matches the findings of academic research which has not yet established a causal link between the CDS prices and bond yields of the best-rated sovereign issuers. The sovereign CDS market is still lacking in depth compared with bond markets, arbitrage possibilities are costly and risky and the operators are not necessarily the same on the two markets. The analyses that have been conducted, especially over the recent period, confirm that neither the CDS nor the bond market can be shown to lead the other. They also show that as long as spread levels remain low, correlations between CDS market and bond market are weak: as long as default risks seem to be contained, bonds play their role as a refuge. However, when sovereign risk rises sharply and spreads reach a certain level, bonds lose their refuge function and a correlation appears. France would seem to have been in such a situation since autumn 2011.
Source: AMF Autorité des marchés financiers
IOSCO Makes Recommendations On OTC Derivative Mandatory Clearing
February 29, 2012--The Technical Committee of the International Organization of Securities Commissions has published a Final Report on Requirements for Mandatory Clearing, which outlines recommendations that authorities should follow in establishing a mandatory clearing regime for standardised OTC derivatives in support of the G20's Leaders Commitments to improve transparency, mitigate systemic risk and protect against market abuse in these markets.
The Report has been prepared by the IOSCO Task Force on OTC Derivatives Regulation in order to provide guidance consistent with the Financial Stability Board’s (FSB) Recommendation 12 in its report on Implementing OTC derivatives Market Reforms. This report asked IOSCO to coordinate the application of central clearing requirements on a product and participant level, and any exemptions from them, as a means of minimizing the potential for regulatory arbitrage.
The Report outlines recommendations that authorities should follow in establishing a mandatory clearing regime within their jurisdiction. These are in relation to:
Determination of whether a mandatory clearing obligation should apply to a product or set of products; Consideration of potential exemptions to the mandatory clearing obligation; Establishment of appropriate communication among authorities and with the public; Consideration of relevant cross-border issues in the application of a mandatory clearing obligation; and Monitoring and reviewing the overall process and application of the mandatory clearing obligation.
view Requirements for Mandatory Clearing report
Source: IOSCO
DTCC Promotes Market Transparency With New CDS Tables
February 29, 2012--DTCC's Across the Pond information series, which provides regular updates on the latest financial reform developments in the U.S. and Europe, has expanded its content to include publication of weekly tables listing credit default swaps (CDS) contracts on the top 15 sovereign and corporate reference entities and top 15 percentage movers.
The addition of the CDS tables in Across the Pond builds on DTCC’s ongoing efforts to promote greater transparency in over-the-counter (OTC) derivatives markets.
Excerpted from public data in DTCC’s Trade Information Warehouse (TIW), the tables are based on net notional values and provide a high-level overview of CDS exposure. The tables are a reliable resource for global market participants, regulators, government officials and journalists who track movements in the OTC derivatives markets.
Source: DTCC
IMF working paper-Systemic Real and Financial Risks: Measurement, Forecasting, and Stress Testing
February 28, 2012--Summary: This paper formulates a novel modeling framework that delivers: (a) forecasts of indicators of systemic real risk and systemic financial risk based on density forecasts of indicators of real activity and financial health; (b) stress-tests as measures of the dynamics of responses of systemic risk indicators to structural shocks identified by standard macroeconomic and banking theory.
Using a large number of quarterly time series of the G-7 economies in 1980Q1-2010Q2, we show that the model exhibits significant out-of sample forecasting power for tail real and financial risk realizations, and that stress testing provides useful early warnings on the build-up of real and financial vulnerabilities.
Source: IMF
IMF Working paper-Does Central Bank Capital Matter for Monetary Policy?
February 28, 2012--Summary: Heavy foreign exchange intervention by central banks of emerging markets have lead to sizeable expansions of their balance sheets in recent years-accumulating foreign assets and non-money domestic liabilities (the latter due to sterilization operations).
With domestic liabilities being mostly of short-term maturity and denominated in local currency, movements in domestic monetary policy interest rates can have sizable effects on central bank's net worth. In this paper we examine empirically whether balance sheet considerations influence the conduct of monetary policy. Our methodology involves the estimation of interest rate rules for a sample of 41 countries and testing whether deviations from the rule can be explained by a measure of central bank financial strength. Our findings, using linear and nonlinear techniques, suggests that central bank financial strength can be a statistically significant factor explaining large negative interest rate deviations from "optimal" levels.
view IMF Working paper-Does Central Bank Capital Matter for Monetary Policy?
Source: IMF
NYSE Liffe U.S. Launches Options on Mini Gold and Mini Silver Futures Contracts
Expands futures product line
Adds depth and liquidity to precious metals market
Enhances client risk management capabilities
February 27, 2012--NYSE Liffe U.S., the U.S. futures exchange of NYSE Euronext (NYX), announced that it successfully launched options on its mini-sized gold and mini-sized silver futures contracts.
These new options contracts are designed to meet growing customer demand to trade and invest in the precious metals market.
The options on NYSE Liffe U.S. 33.2 oz. mini gold and 1,000 oz. mini silver futures contracts provide traders flexibility by offering multiple trading strategies, enhanced risk management capabilities and added depth and liquidity to the underlying mini gold and mini silver futures market.
Source: NYSE Euronext
ETFS US Precious Metals Weekly Silver and gold hit multi-month highs after breaking key technical levels
February 27, 2012--Silver and gold hit multi-month highs after breaking key technical levels. The silver price surged to a five-month high of US$35/oz. last week after moving above its 200-day moving average, a key technical resistance barrier, for the first time since September 2011. It is also interesting to note that silver volatility is at its the lowest level in 16 months, likely aiding the trend.
The bullish mood following the Greek bailout deal also prompted gold to break out of its recent range of US$1700-US$1750. Gold rallied to a 3-month high of US$1780, and should remain well supported by broad macro trends with global central banks remaining biased to providing further stimulus to help sustain the uncertain global recovery.
ECB’s LTRO operations and US growth data key to market mood. The strength of the Euro has added upward momentum to broad commodities and precious metals prices in particular, with silver seeing particularly strong gains. Silver this year has been in a “sweet spot”, with stronger growth indictors but yet still strong demand for “store of value” assets keeping silver in strong demand. The size of the ECB’s long-term liquidity operations (LTRO) will be a key focus this week. While a big number may initially be positive for cyclical assets, it may also raise questions over the health of the Eurozone banking system. A host of manufacturing indicators are also scheduled for release this week, with the US manufacturing ISM key to investor perceptions of the sustainability of the US growth rebound. Europe data will also be watched carefully to see if US growth spillover is occurring, though elevated joblessness and fiscal retrenchment are likely to continue weigh on Eurozone growth prospects.
visit www.etfsecurities.com for more info
Source: ETF Securities
