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ESMA finds deterioration in liquidity in stressed financial markets for both sovereign and corporate bonds
September 25, 2018--The European Securities and Markets Authority (ESMA) today publishes a working paper examining liquidity in EU fixed income markets, providing a broad overview of market liquidity in EU sovereign bond and corporate bond markets.
The study, reporting on different aspects of market liquidity, shows that the situation differs significantly between sovereign and corporate bonds. ESMA has found that sovereign bond market liquidity has increased recently, potentially due to the effects of supportive monetary policy. However, in parallel, it has seen evidence of several episodes of deteriorating secondary market liquidity for corporate bonds, especially between 2014 and 2016.
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Source: ESMA
ESMA monitors volatility in financial markets
September 24, 2018--The European Securities and Markets Authorities (ESMA) has published an article setting out the details of its analysis of volatility in financial markets.
The potential of market volatility to undermine financial stability as well as to impose unexpected losses on investors, is a subject of concern for securities market regulators, and is a key element of ESMA's market monitoring.
Relatively low or high levels of volatility increase the likelihood of stressed financial markets. The two years between February 2016 and January 2018 were characterised by low yields and low volatility, a trend that came to an abrupt end in February 2018 when equity market volatility spiked as markets were globally affected by a strong correction.
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Source: ESMA
Monday Morning Memo: Review of the European ETF Market, August 2018
September 24, 2018--The promoters of ETFs in Europe enjoyed net inflows for August. These inflows led-in spite of a negative market environment-to increasing assets under management in the European ETF industry.
In more detail, the assets under management in the European ETF industry increased from €670.1 bn (as of July 31, 2018) to €671.7 bn at the end of August 2018.
The increase of €1.7 bn for August was driven by net sales (+€2.3 bn), while the performance of the underlying markets contributed a negative €0.7 bn to the assets under management in the European ETF segment.
With regard to the overall number of products, it was not surprising that equity funds (€484.8 bn) held the majority of the assets, followed by bond funds (€158.6 bn), commodity products (€19.2 bn), "other" funds (€4.8 bn), money market funds (€2.8 bn), mixed-asset funds (€1.0 bn), and alternative UCITS products (€0.4 bn).
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Source: Detlef Glow, Thomson Reuters
ESMA agrees to limit the application of tick sizes to systematic internalisers quotes for shares and depositary receipts
September 21, 2018--The European Securities and Markets Authority (ESMA) has published today its opinion on proposed amendments to Commission Delegated Regulation (EU) 2017/587 (RTS 1).
ESMA, considering the need to address the application of tick sizes to systematic internaliser (SIs) quotes in a timely fashion, has agreed to limit the application of tick sizes to quotes of SIs to shares and depositary receipts.
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Source: ESMA
EDHEC-Risk's annual European ETF and Smart Beta Survey results show growing demand for new developments in existing Smart Beta offerings
September 20, 2018--EDHEC-Risk Institute has announced the results of the 11th EDHEC European ETF and Smart Beta and Factor Investing Survey1, conducted as part of the Amundi research chair at EDHEC-Risk Institute on "ETF, Indexing and Smart Beta Investment Strategies".
This survey, conducted since 2006, is aiming to provide insights into European investors' perceptions, practices and future plans in the domain of ETFs and Smart Beta. This year, the survey also includes a special focus on Smart Beta product development, considering specific client demand in the fixed income field.
Among the key findings of this edition:
Since 2006, the increase of the percentage of respondents using ETFs in traditional asset classes has been spectacular: in 2006, 45% of respondents used ETFs to invest in equities, compared with 92% in 2018. As for governments and corporate bonds, the result went from 13% and 6% in 2006, to 62% and 66%, respectively, in 2018.
,p.Satisfaction has remained at high levels especially for traditional asset classes with a significant increase in satisfaction with equity ETFs and government bonds, which now enjoy satisfaction rates of 97% and 92%, respectively.
About two-thirds of respondents (67%) used ETFs to invest in Smart Beta in 2018, a considerable increase compared to 49% in 2014.
view the The EDHEC European ETF
and Smart Beta and Factor Investing Survey 2018 September 2018
Source: EDHEC-Risk Institute
STOXX AI Global Artificial Intelligence ADTV5 Index licensed to Amundi
September 20, 2018--STOXX Ltd., the operator of Deutsche Boerse Group's index business and a global provider of innovative and tradable index concepts, has licensed the STOXX(R) AI Global Artificial Intelligence ADTV5 Index to Amundi as an underlying for an ETF.
The index, launched early in 2018, is one of the world's first indices that uses AI-related algorithms to select companies exposed to the artificial intelligence (AI) megatrend.
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Source: Deutsche Börse Group
What drives the use of CDS by EU investment funds?
September 20, 2018--The European Securities and Markets Authority (ESMA), in a study carried out on data reported under EMIR, finds that funds that are part of a large group are more likely to use credit default swaps (CDS).
A high reliance on CDS is seen, in particular, among fixed income funds that invest in less liquid markets, and alternative funds that implement hedge-fund-like strategies. The main driver of net CDS exposures is fund size.
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Source: ESMA
"Wild West" crypto-assets should be regulated
September 19, 2018--The Treasury Committee publishes a unanimously-agreed Report on crypto-assets for its Digital Currencies inquiry.
Key findings
Regulation needed for "Wild West" crypto-asset market
Problems include volatile prices, hacking vulnerabilities, minimal consumer protection, and anonymity aiding money laundering
Blockchain is currently slow, costly and energy-intensive, but there is potential for data storage uses
The ambiguity of the UK Government and regulators' position is clearly not sustainable
Regulation could improve customer outcomes, enable sustainable growth, and reduce certain risks
view the full report: Crypto-assets Forecasts for the UK economy: September 2018 If you are looking for a particuliar article and can not find it, please feel free to contact us for assistace.
Source: parliament.uk
September 19, 2018--Forecasts for the UK economy is a monthly comparison of independent forecasts.
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Source: Deutsche Börse Cash Market
