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Fall in loan demand shows eurozone weakness
April 28, 2010--Demand by businesses and house buyers in the eurozone for bank loans fell unexpectedly in the first quarter of this year, according to a European Central Bank survey that cast fresh doubt on the strength of economic growth across the 16-country region.
The surprise weakness, revealed in the ECB’s latest bank lending survey, set back hopes that a pick-up in credit provision would oil the wheels of the economic recovery. Banks also tightened further credit standards on business loans and mortgages, the survey showed.
The results came as the ECB reported weak demand from banks in the first offer of three month liquidity conducted as a competitive auction since the intensification of the global economic crisis in late 2008
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Source: FT.com
Europe debt crisis deepens after Spain downgrade
April 28, 2010-- Europe's debt crisis deepened on Wednesday after Spain was slapped with a credit downgrade and pressure mounted for urgent approval of a giant bailout for Greece that could run to 120 billion euros.
The head of the IMF warned confidence in the entire 16-nation euro area was now at stake and Greek Prime Minister George Papandreou said the EU "must prevent a fire... from spreading to the entire European and world economy".
IMF managing director Dominique Strauss-Kahn and European Central Bank president Jean-Claude Trichet travelled to Berlin to drum up support for an EU-IMF aid plan for Greece in which Germany would have to pay the lion's share.
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Source: EU Business
Volcanic ash costs European tourism one billion euros
April 28, 2010--Losses to Europe's tourism sector caused by the ash cloud from Iceland could touch one billion euros, according to a preliminary estimate by the European Commission on Wednesday.
"I take note that the initial estimates of the loss to the sector touch the threshold of one billion euros (1.3 billion dollars)," said European Commissioner for Industry and Entrepreneurship Antonio Tajani in a statement.
He was speaking after a videoconference with European tourism ministers and officials.
The statement said it was too early to gauge the effcts of the crisis on hotels as well as tour operators.
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Source: EU Business
Bailouts in Europe: some precedents
April 28, 2010--Greece's appeal for a debt rescue from the European Union and International Monetary Fund is the latest in a number of bailouts in Europe over the last few decades.
But the IMF has been involved in western Europe in the last 45 years only in Britain in 1976 and in Iceland at the end of 2008.
Most of the Fund's other recent interventions in the European arena have involved central or eastern states, many of them former Soviet bloc members.
The world economic meltdown of the past two years has seen the Fund become more active in the region. Key events:
-- October 2008: The IMF, European Union and and the World Bank put together a joint 20-billion-euro (26-billion-dollar) aid package for HUNGARY.
< a href="http://www.eubusiness.com/news-eu/greece-finance-imf.4ck" TARGET="_top">read more
Source: EU Business
Barclays brings iPath® Exchange Traded Notes to the UK
April 28, 2010-- * Barclays launches first iPath® ETNs on the London Stock Exchange
European exchange traded product (“ETP”) market set to reach $280bn in 2010
Barclays Bank PLC today launched its first iPath® exchange traded notes (“ETNs”) in the UK with 12 new ETNs listed on the London Stock Exchange (LSE), providing investors with exposure to commodities and volatility.
“Barclays Capital has always been at the forefront of delivering innovative, transparent products that help investors diversify their portfolios and access hard-to-reach asset classes. Today’s launch marks a natural extension of the global iPath® ETN platform, which has $6.9bn assets under management,” said Uwe Becker, Managing Director and Head of Investor Solutions Europe, Barclays Capital.
“We see significant demand in the market for products that enable strategies that are not possible in other types of exchange traded products – for example, replicating sectors or accessing volatility,” said Mr Becker. “ETNs provide simplicity and efficiency, cutting down the number of counterparties involved.” Mr Becker said that Barclays chose to launch iPath® ETNs in the UK with equity volatility and commodities products in response to investor demand for diversification. “Volatility and commodities have historically low correlation to other asset classes and, globally, investors have already committed $109.5bn¹ in assets to commodity exchanged traded products as of March 2010,” said Mr Becker.
The iPath® VSTOXX® Short-Term Futures Total Return ETN, launching today, is exclusive to Barclays. It is based on the underlying EURO STOXX 50 Volatility Short-Term Futures Total Return Index – the first of its kind in Europe.
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Source: Barclays Capital
NASDAQ OMX Commodities Introduced Inter Commodity Spread Credit
April 28, 2010--NASDAQ OMX Commodities today successfully introduced Inter Commodity Spread Credit (ICSC). As a result of this, NASDAQ OMX Stockholm's clearing procedures have been updated.
Inter Commodity Spread Credit has been introduced to meet members' growing need for margining efficiencies. The purpose of ICSC is to enable collateral benefits to members by giving credit to off-set positions in products with sustained price correlation when calculating margins.
"The new ICSC methodology aims at reducing the size of margin calls for members pooling their positions in price-correlated instruments with the clearinghouse, says Geir Reigstad, Senior Vice President of NASDAQ OMX Commodities. "Hence, the cost of capital could be significantly reduced for members who decide to maximize the benefit from this innovative solution," he elaborates.
ICSC will offer margin benefits both for products from the same product series (e.g. Nordic power v. German power) and for products from separate product series (e.g. Nordic power v. EUA allowances). ICSC will be implemented within the existing and SPAN®(1) margin model, optimizing the daily margin call for clearing members.
As an example, a member with risk intervals as of April 19, 2010, with offsetting positions in Nordic power e.g. ENOQ3-11 and German power e.g. EDEBLQ3-11, could have had a margin reduction of up to 30 percent, compared to a situation without ICSC.
Source: NASDAQ OMX
AUM of ETF Securities’ Currency ETC platform jumps 72% in one week as investors short AUD and short JPY
April 28, 2010--$41m flows into ETF Securities’ Currency ETC platform last week bringing AUM to $120 million
89% of investors currently short G10 currencies vs. USD, with USD strengthening 9.5% since November
ETFS Short AUD Long USD (SAD) captures 45% of new inflows in April after ETFS Long AUD Short USD (LAUD) rallied 9% in previous 9 weeks
ETFS Short JPY Long USD (SJPY) continues to be the most favoured position with 46% of total ETFS Currency ETC assets
Average weekly trading volume up 177% since the start of 2010 on back of last week record turnover
ETF Securities (ETFS), which launched the world’s largest and Europe’s first platform of Exchange Traded Currencies (ETFS Currency ETCs), has seen assets on the platform grow to around $120 million with average weekly trading volumes continuing to grow, up 177% since the start of 2010 as demand for currency ETCs keeps increasing. We believe growth in the new products further exemplifies investors’ acceptance of the ETC structure.
The fourteen ETFS Currency ETCs, which are short G10 currencies versus USD or EUR, have seen the most interest from investors, making up 89% of assets as of 23rd April 2010. We feel this has occurred as the USD strengthened 9.5% versus the Dollar Index (DXY index) since the recent low on 25th November 2009 to 23rd April 2010.
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Source: ETF Securities
Newly Launched Euro STOXX 50 Volatility Short-Term Futures Index Lincensed To Barclays Capital
April 27, 2010--STOXX Limited, a global index provider and creator of the leading European equity indices, today announced the launch of the EURO STOXX 50 Volatility Short-Term Futures Index (VSTOXX Short-Term Futures Index). The new index measures the performance of a hypothetical, rolling portfolio invested into constant maturity implied volatilities on the underlying EURO STOXX 50 Index.
The VSTOXX Short-Term Futures Index – the first of its kind in Europe – has been licensed to Barclays Capital to underlie an exchange-traded note (ETN).
“As the importance of volatility as an asset class of its own grows steadily, STOXX adds the newest index to its strategy index family, thereby reinforcing its commitment to develop innovative and complex index concepts,” said Hartmut Graf, chief executive officer, STOXX Ltd. “The VSTOXX Short-Term Futures Index is a superior tool to measure the return from a rolling long position in the first and second month EUREX VSTOXX futures contracts.”
Dixit Joshi, Managing Director, head of equities EMEA, Barclays Capital commented: "We are delighted to have worked jointly with STOXX towards the launch of this new benchmark index. Volatility has become an essential tool used by many of our clients both for diversifying traditional equity portfolios and for taking outright views on its direction. The VSTOXX Short-Term Futures Index will provide our clients with transparent and liquid access to implied volatility."
EU wants sight of data on OTC trades
April 27, 2010--Michel Barnier, the European Union official driving reform of the bloc’s financial regulation, has told US Treasury secretary Tim Geithner that EU regulators will need “unfettered access” to data on swaps trading held in “trade repositories” as they tighten scrutiny of the over-the-counter derivatives market.
His comment, in a letter to Mr Geithner seen by the Financial Times, is a sign that the issue of such repositories is becoming politically sensitive amid an overhaul of the over-the-counter, or off-exchange, markets for derivatives.
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Source: FT.com
EU opens consultation on double taxation
April 27, 2010--The European Commission launched today an online public consultation to ask individuals, companies and tax advisers for information on double taxation problems that they have encountered when operating across borders within the EU.
“Double taxation can deter cross-border activity in the EU and the functioning of the Internal Market. I am determined to tackle this obstacle. This consultation will help us to assess the real scale and financial impact of double taxation for citizens and businesses. I will then work towards finding the most appropriate and effective solutions," said EU Commissioner for Taxation and Customs Union.
The aim of the public consultation is to clearly identify the nature of the problems that EU taxpayers are facing and the extend to which many individuals and companies are encountering the problem of being taxed on the same income or profits in two or more different Member States.
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Source: EUbusiness
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