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ECB steps up pace of bond-buying in bid to tame rise in borrowing costs
March 23, 2021--Europe is facing a difficult second quarter as coronavirus infections rise and governments reimpose lockdown measures, but the European Central Bank will do its part to keep borrowing costs ultra low, ECB chief economist Philip Lane said on Tuesday.
Fearing that rising borrowing costs would derail the recovery, the ECB earlier this month promised to ramp up bond purchases to keep yields low. Figures published on Monday showed its buys of mostly government bonds were already up by a half in the week since that decision.
Turkish lira tumbles in echoes of last year's meltdown
March 22, 2021--Turkey's lira plunged more than 4 percent against the U.S. dollar on Friday, its biggest one-day fall since a currency crisis took hold in August, raising concerns that Turks are buying more foreign cash as ties with Washington deteriorate.
The 2018 crisis, which tipped the economy into recession, was echoed across Turkish financial markets on Friday, with stocks hitting their lowest levels since January.
The currency shrugged off a stop-gap decision by the central bank to suspend one-week repo auctions in an attempt to squeeze liquidity in the market. The average cost of funding in Turkey saw a near record jump.
Investors' doubts rise over LSE takeover of Refinitiv
March 21, 2021--Worries have increased over scale of challenge to integrate business
Stock markets offer a blunt measure of buyer's remorse.
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UBS Licenses Solactive Index for new China Technology ETF
March 19, 2021--China is pushing for technical innovation. The world's second-largest economy is currently transitioning towards a "New Economy" where innovation and digital transformation are the key driving forces. Swiss bank UBS pooled the vast opportunities of this development in a dedicated ETF, the UBS Solactive China Technology UCITS ETF. The Exchange Traded Fund will be launched on March 19th, 2021, and it tracks the Solactive China Technology Index.
This release marks a new engagement between UBS and Solactive after the successful launches of previous ETFs and Index Certificates[1].
The Chinese tech industry is emerging as a high-profile opportunity for investors globally, and the pandemic has considerably accelerated this process. Record high internet, app, and mobile payment usage confirm this trend, and many companies in this industry are benefiting from both this growing demand as well as from supportive political initiatives. Above all, China is shaping up to be a tech leader beyond the IT industry. It has become the largest Electric Vehicle market globally[2], is bound to challenge the US' dominance in the biotech industry[3], and is a creative hub from many technologically oriented sectors.
ESMA clarifies application of position limits pending MiFID II change
March 19, 2021--The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, is issuing a public statement on its supervisory approach to position limits for commodity derivatives. The purpose is to clarify the application of position limits and coordinate the supervisory actions of National Competent Authorities (NCAs), pending the legislative change introduced by the MiFID II Recovery Package for commodity derivatives.
This legislative change will start to apply in early 2022.
Position limits, under the amended legal provisions, will only continue to apply to agricultural commodity derivatives and critical or significant commodity derivatives. In addition, positions that are objectively measurable as resulting from transactions entered into to fulfil obligations to provide liquidity on a trading venue will be exempted from position limits.
ETFGI reports record assets of US$1.33 trillion invested in ETFs and ETPs listed in Europe at the end of February 2021
March 19, 2021-- ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs/ETPs ecosystem, reported today that ETFs and ETPs listed in Europe reported net inflows of US$22.15 billion during February, bringing year-to-date net inflows to a record US$42.66 billion.
Assets invested in the European ETFs/ETPs industry have increased by 2.3%, from US$1.30 trillion at the end of January, to US$1.33 trillion, according to ETFGI's February 2021 European ETFs and ETPs industry landscape insights report, the monthly report which is part of an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Assets invested in European ETFs and ETPs industry reach a record $1.33 trillion at the end of February.
Net inflows gathered in February were $22.15Bn, are the second highest behind the $27.17 Bn gathered in December 2020.
11 consecutive month net inflows.
YTD net inflows of $42.66 are a record, beating the prior YTD record of $25.86 Bn in February 2018 and much higher than the $21.23Bn gathered at this point in 2020.
Equity ETFs/ETPs listed in Europe attracted $35.22 Bn accounting for the majority of net inflows in February.
Shining a light on climate risks: the ECB's economy-wide climate stress test
March 18, 2021--Climate change is one of the greatest challenges facing humankind this century. If left unchecked, it is likely to result in more frequent and more severe climate events, causing widespread devastation and economic disruption.
Substantial changes in our production, consumption and living habits are required if the world is to avert catastrophic climate change. However, the changes required may themselves disrupt the economy and the financial system.
While the primary responsibility for combating climate change lies with governments, central banks can play an important contributory role. They can help ensure that the financial system is resilient to the transition to a low-carbon economy, by providing more and better information to market participants on the risks from climate change. Stress tests can be an important tool here, as they can cast a light on climate risks that currently still lurk in the darkness.
ESMA sees high risk for investors in non-regulated crypto assets
March 17, 2021--The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today publishes its first Trends, Risks and Vulnerabilities (TRV) Report of 2021. The Report analyses the impact of COVID-19 on financial markets during the second half of 2020 and highlights the increasing credit risks linked to significant corporate and public debt overhang, as well as the risks linked with investments in non-regulated crypto-assets.
Continued high risk across financial markets
Globally, risks in markets under ESMA's remit remain very high. The significant rebound of equity markets and the valuation of debt indices which reached pre-pandemic levels, contrast with weak economic fundamentals. The main risk for European Union's (EU) financial markets is that this ongoing decoupling leads to a reversal in investor risk assessment and a sudden market correction.
Crypto-assets: ESAs remind consumers about risks
As crypto-assets, including so-called virtual currencies such as Bitcoin, continue to attract public attention, the European Supervisory Authorities (EBA, EIOPA and ESMA - together the 'ESAs') recall the continued relevance of their previous warnings.
UBS AM debuts climate aware ETF with global exposure to large-and mid-cap
March 17, 2021--Available for flat fee of 0.19%
The UBS Climate Aware Global Developed Equity CTB UCITS ETF will mirror the firm's existing climate aware framework in an ETF wrapper, offering investors access to large- and mid-cap global equities with a "strong climate profile".
It will track the Solactive UBS Climate Aware Global Developed Equity CTB index, which has been designed to mimic UBS AM's climate aware framework, while tilting holdings towards companies with a best-in-class climate score and excluding laggards.
New Lyxor ETFs on Xetra: high-yield bonds from ESG companies worldwide
March 16, 2021--Two new exchange traded funds issued by Lyxor International Asset Management have been tradable on Xetra and Börse Frankfurt since Tuesday.
With the Lyxor USD High Yield UCITS ETF-Dist, investors invest in fixed-rate, US dollar-denominated high-yield corporate bonds from developed markets that meet sustainability criteria.
The sectors considered are industrials, utilities, and financial services, as well as bonds with an outstanding volume of at least USD 300 million and a residual term of at least one year. Accruing interest payments are distributed to the investors.
Companies with significant business activities in the areas of nuclear energy, tobacco, thermal coal, alcohol, gambling, weapons, and genetically modified organisms are excluded. Furthermore, companies must not be involved in controversial activities that violate applicable norms or social standards and could lead to legal disputes. This applies, for example, to the careful handling of the company's own workforce or the sensitive data of customers, as well as sustainable and environmentally friendly production.
