Americas ETP News
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Credit Suisse replaces Barclays as biggest swaps clearer
July 17, 2014--Credit Suisse has leapfrogged Barclays to become the biggest over-the-counter derivatives clearer in the US, as measured by the amount of client margin its futures commission merchant (FCM) is required to hold.
As of June 30, the Swiss bank faced a requirement of at least $7.2 billion for cleared swaps-a figure that has shot up 83% in the past eight months- according to data compiled by the National Futures Association (NFA).
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Source: Risk.net
Exclusive: SEC targets 10 firms in high frequency trading probe-SEC document
July 17, 2014--The U.S. Securities and Exchange Commission has been seeking information on 10 registered broker dealers as part of an ongoing investigation into high-frequency trading strategies, according to an internal SEC document reviewed by Reuters.
The regulator told its staff in late March that it was interested in seeing any tips, complaints, or referrals that they receive concerning the brokers and high frequency trading.
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Source: Reuters
Bond Fee Disclosures Sought by SEC to End 38-Year Debate
July 17, 2014--After a 38-year debate on how to make trading costs for corporate and municipal debt transparent, regulators are making another attempt at forcing dealers to disclose how much they earn on the transactions.
The Municipal Securities Rulemaking Board will discuss a proposal at the end of the month, Executive Director Lynnette Kelly said yesterday, after U.S. Securities and Exchange Commission Chair Mary Jo White asked the regulator to come up with a plan by year end.
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Source: Bloomberg
Semiannual Monetary Policy Report to the Congress-
July 15, 2014--Chairman Johnson, Ranking Member Crapo, and members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress.
In my remarks today, I will discuss the current economic situation and outlook before turning to monetary policy. I will conclude with a few words about financial stability.
Current Economic Situation and Outlook The economy is continuing to make progress toward the Federal Reserve's objectives of maximum employment and price stability.
view the Monetary Policy Report-Current Report: July 15, 2014
Source: FBR
The 2014 Long-Term Budget Outlook
July 15, 2014--Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar. The total amount of federal debt held by the public is now equivalent to about 74 percent of the economy's annual output, or gross domestic product (GDP)-a higher percentage than at any point in U.S. history except a brief period around World War II and almost twice the percentage at the end of 2008.
If current laws remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits would push debt back to and above its current high level. Twenty-five years from now, in 2039, federal debt held by the public would exceed 100 percent of GDP, CBO projects. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.
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Source: Source: Congressional Budget Office (CBO)
DB-Synthetic Equity & Index Strategy-North AmericaUS ETF Market Weekly Review -US ETP assets dropped by $12.4bn, but gathered $6.1bn in new cash
July 15, 2014--Data in this report is as of Friday, July 11
Market and Net Cash Flows Review
The US (S&P 500) fell by 0.90%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 2.40% and 0.30%, respectively. Performance was mostly negative across US sectors. The Utilities (+0.79%) and the Consumer Staples (+0.28%) sectors recorded the only increases; meanwhile, Energy (-1.95%) and Financials (-1.59%) were the worst performing sectors.
The DB Liquid Commodity Index fell by 2.37%; similarly, the Agriculture sector (DB Diversified Agriculture Index), and the WTI Crude Oil fell by 4.31% and 3.10%, respectively; while, Gold and Silver prices rose by 1.37% and 1.31%, respectively. Moving into other asset classes, the 10Y US Treasury Yield dropped by 12bps ending at 2.53%. Last but not least, Volatility (VIX) rose by 17.05% during the same period.
The total US ETP flows from all products registered $6.1bn (+0.3% of AUM) of inflows during last week vs. $0.1bn (+0.0%) of inflows the previous week, setting the YTD weekly flows average at +$2.8bn (+$79.2bn YTD in total cash flows). Equity, Fixed Income and Commodity ETPs experienced flows of +$5.6bn (+0.4%), -$45mn (-0.0%), and +$0.6bn (+0.9%) last week vs. +$1.2bn (+0.1%), -$1.8bn (-0.6%), and +$0.7bn (+1.1%) in the previous week, respectively.
Among US sectors, Consumer Discretionary (+$0.5bn, +5.3%) and Consumer Staples (+$0.1bn, +1.0%) received the top inflows, while Industrials (-$0.9bn, -4.9%) and Financials (-$0.5bn, -0.7%) experienced the largest outflows.
Top 3 ETPs & ETNs by inflows: SPY (+$4.0bn), QQQ (+$1.0bn), IVV (+$0.6bn)
Top 3 ETPs & ETNs by outflows: IWM (-$1.8bn), DXJ (-$0.5bn), IYR (-$0.5bn)
New Launch Calendar: REITs, Euro Zone, Multi-Assets & Women in Leadership
There were three new ETFs and one new ETN listed during the previous week. AdvisorShares listed one new actively managed multi-asset ETF; meanwhile, BlackRock added one new ETF focusing on Global REITs, in addition to expanding its currency-hedged lineup with one new Euro Zone focused ETF; last but not least, Barclays listed one new thematic ETN offering exposure to US companies with gender-diverse executive leadership and governance.
Turnover Review: Floor activity increased by 34%
Total weekly turnover increased by 34.0% to $264.6bn vs. $197.5bn from the previous week. However, last week's turnover level was 7.6% below last year's weekly average. Equity ETPs turnover increased by $67.2bn (+38.9%); while Fixed Income and Commodity ETPs turnover decreased by $0.1bn (-0.5%) and $0.6bn (-8.1%), respectively.
Assets under Management (AUM) Review: Assets decreased by $12.4bn
US ETP assets dropped by $12.4bn (-0.7%) totaling $1.837 trillion at the end of the week. As of last Friday, US ETPs had accumulated an asset growth of +9.5% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$14.0bn, +$0.7bn, and +$0.9bn during last week, respectively.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
Horizons ETFs launches Canada's first Midstream Oil & Gas ETF
Canadian Midstream Oil & Gas ETF seeks to provide investors with lower volatility and high-yield exposure to Canada's energy sector
July 15, 2014--Horizons ETFs Management (Canada) Inc.("Horizons ETFs")is pleased to announce the launch of the Horizons Canadian Midstream Oil & Gas Index ETF ("HOG"), the first Canadian-listed ETF focused exclusively on Canada's midstream oil and gas sector.
It will begin trading on the TSX today, under the ticker symbol HOG.
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Source: Horizons ETFs Management (Canada) Inc.
Yellen defends loose Fed policy, says job market still too weak
July 15, 2014--Federal Reserve Chair Janet Yellen said U.S. labor markets are far from healthy and signaled the Fed will keep monetary policy loose until hiring and wage data show the effects of the financial crisis are "completely gone."
Despite strong recent jobs reports and other signs of continuing recovery, Yellen emphasized in testimony to the Senate Banking Committee that she won't conclude the economy has recovered until wages start rising and discouraged workers return to the labor force.
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Source: Reuters
Dodd calls for one US prudential regulator
July 15, 2014--Chris Dodd, the former US senator responsible for the landmark Dodd-Frank financial reform bill, said the idea of paring down the number of banking regulators could come back to life now that the public had seen the complexity of having so many oversight agencies.
During the 2010 Dodd-Frank talks to overhaul the financial system after the 2008 financial crisis, Mr Dodd and other lawmakers complained about the fragmented, confusing US regulatory structure...
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Source: FT.com
Fed Eyes Banks' Commodity Activities
Some Say Companies Use Their Foothold in Market to Influence Supply Flows and Prices; Risk Also an Issue
July 14, 2014--The Federal Reserve took a small step toward developing potential new restrictions on bank's activities in physical-commodity markets such as aluminum and oil, but it stopped short of introducing new rules.
The Fed, which has been studying the issue for at least two years, said it wants to examine "all aspects" of bank-owned commodity businesses, including "potential conflicts of interest" at the banks and the risks that commodity subsidiaries might pose to financial stability.
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Source: Wall Street Journal
