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ESMA updates its risk assessment in light of the COVID-19 pandemic
April 2, 2020--The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today updates its risk assessment to account for the impact of the COVID-19 pandemic.
The pandemic. in combination with existing valuation risks, has led to large equity market corrections since mid-February, driven by a sharp deterioration in the outlook for consumers, businesses and of the economic environment. Corporate bond, government bond markets and a number of investment funds show signs of stress. Market infrastructures have continued to function in an orderly manner despite significant surges in trading activity, the use of circuit breakers and increases in derivatives margins.
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Source: ESMA
Cash market trading volumes in March
April 1, 2020--Deutsche Börse's cash markets generated a turnover of €300.7 billion in March (previous year: €130.3 billion).
€259.6 billion were attributable to Xetra (previous year: €117.8 billion), bringing the average daily Xetra trading volume to €11.8 billion.
Trading volume on Börse Frankfurt was €8.4 billion (previous year: €2.9 billion) and on Tradegate Exchange €32.7 billion (previous year: €9.6 billion).
By type of asset class, equities accounted for around €256.8 billion in the entire cash market. Trading in ETFs/ETCs/ETNs generated a turnover of €39.0 billion. Turnover in bonds was €1.0 billion, in certificates €3.3 billion and in funds €0.6 billion.
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Source: Deutsche Börse Cash Market
Will the economic strategy work?
April 1, 2020--Because even thriving companies can be killed in a matter of weeks by a recession of the magnitude now confronting the world, advanced-economy governments have reacted in a remarkably similar fashion to the COVID-19 crisis. But extending liquidity lifelines to private businesses and supporting idled workers assumes a short crisis.
With the COVID-19 crisis bringing France to a halt, Insee, the French statistical institute, puts the drop in economic activity relative to normal at 35%. It reckons that the fall in household consumption is of a similar magnitude.
These numbers imply that each additional month of lockdown reduces annual GDP by three percentage points. And sectoral situations are obviously worse: business output is down 40%, manufacturing output down 50%, and some services sectors have come to a complete standstill. Ex ante estimates for Germany and the United Kingdom are similar, and, if anything, corresponding numbers may be larger in economies with a smaller public sector.
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Source: bruegel.org
The BME leadership rules in favor of the Six takeover bid unanimously
April 1, 2020--The Board of Directors of Bolsas y Mercados Españoles (BME) has unanimously approved the mandatory report on the public tender offer (OPA) of shares formulated by the Swiss group Six on all the shares of the stock market operator. This operation was already authorized by the National Securities Market Commission (CNMV) on March 25 and a day earlier by the Government.
In a document sent by the BME to the CNMV, it is stated that "all the members attended, present or represented, all the members of the board of directors and that the report has been approved with the favorable vote of all of them."
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Source: archyde.com
ESMA provides clarifications for best execution reports under MiFID II
March 31, 2020--The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, is issuing a Public Statement to clarify issues regarding the publication by execution venues and firms of the general best execution reports required under RTS 27 and 28 of MiFID II, in light of the COVID-19 pandemic.
ESMA and competent authorities are aware of difficulties encountered by execution venues and firms in preparing these reports due to the COVID-19 pandemic and the related actions taken by the Member States to prevent contagion.
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Source: ESMA
Unscheduled adjustment in SDAX
March 30, 2020--Adler Real Estate AG to be deleted from index, BayWa AG to be added
On Monday, Qontigo announced an unscheduled change to the SDAX index.
Due to the takeover of Adler Real Estate AG (DE0005008007) by ADO Properties (LU1250154413) the free float of Adler Real Estate AG falls below 10 percent.
According to the Guide to the DAX Equity Indices, section 5.1.5. Adjustments in the Case of Mergers and Acquisitions, Adler Real Estate AG shares will be deleted from the SDAX index. They will be replaced by BayWa AG (DE0005194062).
These changes will become effective on 2 April 2020.
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Source: Deutsche Börse
Regulators across Europe clash over bans on short selling
March 30, 2020--Some countries prohibit bets on lower prices, while others warn bans make matters worse
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Source: FT.com
Direxion Is Accelerating The Shifts Of 10 ETFs From 3x Leverage To 2x Leverage As Volatility Remains High
March 27, 2020--Direxion is dramatically altering the time frame for shifting 10 of its geared exchange traded funds to double from triple leverage, saying that those changes will go into effect after the close of U.S. markets on March 31 after originally being slated to be implemented on May 19.
Citing an unprecedented spike in market volatility at the hands of the COVID-19 pandemic, Direxion said last week it planned to reduce the daily leverage exposure on 10 well-known ETFs, including the Direxion Daily Gold Miners Index Bull 3X Shares NUGT, and the Direxion Daily Gold Miners Index Bear 3X Shares DUST, to 2x from 3x.
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Source: marketwatch.com
Lyxor first provider to launch an ecosystem of ETFs designed to counter climate change
March 26, 2020- Today, Lyxor ETF is delighted to announce that it is the first ETF provider to make a full range of ETFs designed to counter climate change available to investors. These ETFs, the first of their kind in Europe, are designed to be consistentwith the carbon emission reduction targets of the Paris Agreement of 2015.
Investors will be able to access European, US, Emerging Markets and World equity exposures in a simple, transparent and cost-effective way. Two of the ETFs (Emerging Markets and US) were listed today on Euronext (in EUR), and they'll also be listed on London Stock Exchange (in USD) on April 7th.Two further ETFs will follow shortly.
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Source: Lyxor
Monetary developments in the euro area: February 2020
March 26, 2020--Annual growth rate of broad monetary aggregate M3 increased to 5.5% in February 2020 from 5.2% in January
Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, increased to 8.1% in February from 7.9% in January
Annual growth rate of adjusted loans to households stood at 3.8% in February, compared with 3.7% in January
Annual growth rate of adjusted loans to non-financial corporations decreased to 3.0% in February from 3.2% in January
Components of the broad monetary aggregate M3
The annual growth rate of the broad monetary aggregate M3 increased to 5.5% in February 2020 from 5.2% in January, averaging 5.2% in the three months up to February. The components of M3 showed the following developments.
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Source: ECB