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Spring forecast 2012-13: towards a slow recovery
May 11, 2012--Following the output contraction in late 2011, the EU economy is estimated to be currently in a mild recession.
While uncertainty about economic and financial prospects remains high, strong policy actions and major advancements in the EU institutional framework have brought about an easing of financial market tensions in the beginning of 2012 and a tentative stabilisation of confidence, expected to further strengthen over the forecast period. Together with an expected acceleration in global growth, the recovery is forecast to set in slowly from the second half of the year on.
The picture presented in the interim forecast in February is broadly confirmed for 2012, with real GDP projected to stagnate in the EU and to contract by -0.3% in the euro area. For 2013, growth is forecast at 1.3% in the EU and 1.0% in the euro area. Unemployment is expected to remain high at 10% in the EU and 11% in the euro area over the forecast period. Inflation is set to moderate gradually as the impact of higher oil prices and tax increases fades away. Fiscal consolidation is forecast to progress, with public deficits in 2013 declining to 3.3% in the EU and just below 3% in the euro area. The economic situation differs considerably across Member States, also in view of the ongoing adjustment to the large disparities in external positions and structural conditions that have come to the fore over the last years.
view the EU European Economic Forecast-Spring 2012
Research Reveals That 1.4bn (euro) Flowed Into European Listed Commodity Exchange Traded Products In Q1 2012
May 11, 2012--Commodities remain an important area in terms of asset gathering for European ETPs and new analysis by Lyxor reveals that in the first quarter of 2012 over €1.4bn has flowed into these exposures, which represents over 26% of all ETP net asset inflows.
In terms of total assets under management commodities, at close to €46bn, represent over 18.5% of the total ETP market.
Whilst historically the key area for asset gathering has been in gold-related ETPs, the most recent trends in Q1 have seen substantial inflows into energy related exposures on the back of the rising oil price driven by macro-economic and political concerns.
In the 12 months to March 2012, there were net inflows of €4.52 billion into commodity based European listed ETPs.
FSA publishes Recovery and Resolution Plan (RRP) update
May 10, 2012--The Financial Services Authority (FSA) has published a feedback statement setting out the approach being taken by the FSA to ensure firms develop appropriate recovery plans and resolution packs.
The feedback statement provides firms with clarity regarding what they are expected to do while final rules are being adjusted to take into account developments in the international arena. A draft of the core rules has been published with today’s feedback statement, and final rules will be published in the autumn.
The decision to delay the final rules is due to the various significant international developments which are relevant to RRP, notably the expected proposal by the EU Commission for a directive on recovery and resolution. Accordingly, the FSA is publishing today’s feedback statement, along with draft ‘core’ rules and an updated information pack.
S&P warns of $46tn refinancing challenge
May 10, 2012--European companies could face serious challenges refinancing a wall of maturing debt over the next few years as the region's banks deal with the impact of regulation and fallout from the eurozone debt crisis, according to a new report from Standard & Poor's.
The rating agency predicted that companies round the world would need new funding or to refinance existing debt totalling as much as $46tn over the next five years. And while global banks and debt capital markets should largely be able to provide the majority of funding for companies, S&P raised concerns about the ability of European lenders in particular to meet all corporate funding needs as they deal with the impact of sluggish economic growth and tough regulatory requirements.
SPDR ETF on Asian government bonds launched on Xetra
May 10, 2012---A new exchange-listed bond index fund issued by SPDR (State Street Global Advisors) has been tradable on Xetra since Thursday.
ETF name: SPDR Citi Asia Local Government Bond ETF
Asset class: bond index ETF
ISIN: IE00B7GBL799
Total expense ratio: 0.50 percent
Distribution policy: distributing
Benchmark: Citi Asian Government Bond Investable Index
The SPDR Citi Asia Local Government Bond ETF enables investors to participate for the first time in the performance of a broadly diversified basket of Asian government bonds. The index currently contains government bonds from China (offshore), Hong Kong, Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand. The maximum weighting of a single country is limited to 20%.
The product offering in Deutsche Börse’s XTF segment currently comprises a total of 970 exchange-listed index funds, making it the largest offering of all European stock exchanges.
Fuhr: costs fall as rivalry grows --but TERs still have a long way to go
May 9, 2012--Total expense ratios (TERs) for exchange traded funds (ETFs) in Europe have declined over the past year as increasing competition among providers has helped drive costs down.
According to the latest research by ETFGI, the overall average TER for ETFs in Europe is now 36 basis points (bps) down from 37bps in January 2011.
TERs for ETFs listed in Europe are still higher than the TERs for ETFs listed in the US where the overall average is 29bps, down from 32bps in January 2011.
OTC derivatives market activity in the second half of 2011
May 9, 2012--Large movements in the latest data are highlighted in the Statistical release. An analysis of recent trends will be released in conjunction with the forthcoming BIS Quarterly Review, to be published on 4 June 2012. Data at end-June 2012 will be released no later than 15 November 2012.
Data at end-December 2011 are not fully comparable with previous periods because of an increase in the reporting population. Australia and Spain reported for the first time, expanding the reporting population to dealers headquartered in 13 countries
view the Detailed tables on semiannual OTC derivatives statistics at end-December 2011
European ETF market slumps after strong first quarter
May 9, 2012--The European ETF market slowed in April with outflows rising, dealing a blow to those predicting better growth this year.
The industry experienced outflows of close to €4bn over April, reducing net inflows for the first four months down to €1.8bn and making April the worst month in terms of flows this year, according to the data.
iShares expands fixed income range with eight single country Eurozone sovereign
Five funds offer world-first exposures for an ETF format
May 9, 2012-- iShares, the Exchange Traded Funds (ETF) platform of
BlackRock, Inc. (NYSE: BLK) today announced the launch of eight funds that provid precise and targeted exposure to the sovereign debt of eight Eurozone countries.
The launch represents the continued expansion of iShares’ fixed income range to meet growing interest in fixed income ETFs, and to satisfy demand for more granular exposures within the asset class.
The eight funds to launch on the London Stock Exchange today are:
1. iShares Barclays Austria Treasury Bond ETF
2. iShares Barclays Belgium Treasury Bond ETF
3. iShares Barclays Finland Treasury Bond ETF
4. iShares Barclays France Treasury Bond ETF
5. iShares Barclays Germany Treasury Bond ETF
6. iShares Barclays Italy Treasury Bond ETF
7. iShares Barclays Netherlands Treasury Bond ETF
8. iShares Barclays Spain Treasury Bond ETF
The ETFs invest in the fixed rate debt issued by the government of the specified country, denominated in local currency, with the bonds having at least one year until maturity. They are physically backed funds and each has a total expense ratio of 0.20%.
The ETFs providing exposure to sovereign debt from Austria, Belgium, Finland, the Netherlands and Spain are the first of their kind in the world.
Greece at risk of leaving eurozone, says official
May 9, 2012--Greece could be forced to leave the eurozone if it fails to abide by EU and IMF loan commitments, a government economic advisor warned Wednesday as Athens raised prospects of renegotiating a bailout deal.
"If we say no to everything, we leave the eurozone," said Gikas Hardouvelis, economic advisor to outgoing Prime Minister Lucas Papademos.
Voters roundly rejected austerity measures in Sunday's elections, booting out a coalition by the two mainstream parties and leaving the radical left-wing Syriza party charged with forming a government.
