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ECB staff macroeconomic projections for the euro area
September 2, 2010-On the basis of the information available up to 20 August 2010, ECB staff have prepared projections for macroeconomic developments in the euro area.1
Average annual real GDP growth is projected to be between 1.4% and 1.8% in 2010 and between 0.5% and 2.3% in 2011. Inflation is projected to be broadly stable in a range between 1.5% and 1.7% in 2010 and between 1.2% and 2.2% in 2011
Technical assumptions about interest rates, exchange rates, commodity prices and fiscal policies
The technical assumptions about interest rates and both energy and non-energy commodity prices are based on market expectations, with a cut-off date of 13 August 2010.2 The assumption about short-term interest rates is of a purely technical nature. Short-term rates are measured by the three-month EURIBOR, with market expectations derived from futures rates. The methodology gives an overall average level of short-term interest rates of 0.8% for 2010 and 1.1% for 2011. The technical assumptions for euro area ten-year nominal government bond yields are also derived from market expectations and imply an average level of 3.6% in 2010 and 3.8% in 2011.3 The baseline projection takes into account further improvements in financing conditions and assumes accordingly that, over the projection horizon, bank lending rate spreads vis-à-vis the above-mentioned interest rates will stabilise or narrow somewhat. Similarly, credit supply conditions are assumed to ease over the projection horizon. As regards commodities, on the basis of the path implied by futures markets in the two-week period ending on the cut-off date, oil prices per barrel are assumed to average USD 78.8 in 2010 and USD 84.0 in 2011. The prices of non-energy commodities in US dollars are assumed to rebound strongly, by 39.1% in 2010 and a further 11.0% in 2011.
Bilateral exchange rates are assumed to remain unchanged over the projection horizon at the average levels prevailing in the two-week period ending on the cut-off date. This implies a EUR/USD exchange rate of 1.31 over the whole projection horizon and an effective exchange rate of the euro that, on average, depreciates by 6.5% in 2010 and a further 1.4% in 2011.
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Source: European Central Bank (ECB)
ETF Landscape: STOXX Europe 600 Sector ETF Net Flows, week ending 27-Aug-10
September 1, 2010--Last week saw US$3.6 Mn net outflows from STOXX Europe 600 sector ETFs. The largest sector ETF outflows last week were in Industrial Goods & Services with US$66.5 Mn and Telecommunications with US$58.4 Mn while Banks experienced net inflows of
US$176.6 Mn.
Year-to-date, STOXX Europe 600 sector ETFs have seen US$227.4 Mn net outflows. Food & Beverage sector ETFs have seen the largest net outflows with US$163.4 Mn, followed by Basic Resources with US$158.5 Mn while Media has experienced the largest net inflows with US$205.8 Mn YTD.
The US$8.2 Bn AUM invested in the ETFs is greater than the US$3.7 Bn open interest in the sector futures. The ETF AUM is greater than the open interest in each of the corresponding futures contract in all 19 sectors.
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Source: Global ETF Research & Implementation Strategy Team, BlackRock
Registration for debt issuance programs – simpler and more efficient for bond issuers
September 1, 2010--Oslo Børs now offers issuers of bonds the opportunity to register their debt issuance programs, offering a simpler and more efficient way to list bond issues.
Issuers benefit from the convenience of bringing together all their bond issues as part of a single issuance program, and also benefit from lower fees. Nordea Eiendomskreditt is the first issuer to register a debt issuance program on Oslo Børs.
A debt issuance program is a detailed description of an issuer and of all the terms and conditions that apply to the issuer’s bonds that are included in the program. Debt issuance programs make it possible for issuers of bonds to bring together all their bond issues with a single prospectus, subject to not exceeding the overall limit set for the program. In addition, a debt issuance program simplifies the procedures and documentation required when new bonds are issued.
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Source: Oslo Børs
Boerse Stuttgart has a turnover of EUR 7 billion in August
Trading volumes for securitised derivatives up by almost 10 percent/ volumes double for reverse convertible bonds/ EUR-denominated government bonds still very popular with investors
September 1, 2010--In August 2010, Boerse Stuttgart, according to its order book statistics, had a turnover of over EUR 7 billion. Trading traditionally tends to be somewhat thinner in the holiday month of August and this year was no exception, but trading volumes were still only slightly less in a year-on-year comparison.
Securitised derivatives accounted for the lion's share of the total turnover of EUR 4.1 billion.
The monthly turnover is there up by more than 10 percent on the previous month's figure. In a year-on-year comparison derivatives even generated as much as nearly 11 percent more turnover. Most of this can be attributed to by leverage products (EUR 2.1 billion) and investment products (around EUR 2 billion). During the period from January to August reverse convertible bonds even doubled in a year-on-year comparison with a growth of 100 percent.
In bond trading, Boerse Stuttgart had a turnover of some EUR 1.8 billion. The large proportion of turnover accounted for by corporate bonds underlines the importance that Boerse Stuttgart has as a major trading place for corporate bonds. In August trading volumes in corporate bonds amounted to more than EUR 1.1 billion. Trading in government bonds saw heavy demand for EUR-denominated government bonds. With a growth of more than 40 percent in comparison with July, trading volumes for these securities were up once again. Besides Greek government bonds, investors in August were mainly looking to buy Irish and Spanish bonds.
Trading in equities was up by almost 3 percent in comparison with the previous month. The total trading volume for company equities amounted to EUR 682 million. With a turnover of more than EUR 490 million, trading in German equities accounted for the bulk of this volume.
In investment fund trading, the monthly turnover in August amounted to almost EUR 430 million. Although it was therefore slightly down on the previous month, turnover in trading in investment fund units was up by more than a quarter in comparison with August 2009. This was mainly accounted for by trading in exchange-traded funds (ETFs). The over 61 percent year-on-year increase in turnover in the period from January to August is indicative of the strong performance of these securities in recent months.
Source: Boerse Stuttgart
Deutsche Börse: Xetra turnover slightly up in August
14.4 million trades executed on Xetra/ Total volume of 102.7 billion euros traded on all stock exchanges in Germany
September 1, 2010-- In August, 89.7 billion euros were traded on Xetra and on the floor at Börse Frankfurt – an increase of 3 percent year-on-year (August 2009: 87.5 billion euros). Of the 89.7 billion euros, 83.8 billion euros were traded on Xetra, an increase of 3 percent year-on-year (August 2009: 81.1 billion euros). 5.9 billion euros were traded on the floor, a decrease by 7 percent (August 2009: 6.4 billion euros).
Turnover in German equities on Deutsche Börse’s cash markets amounted to 75.8 billion euros, while foreign equities turnover stood at 10.9 billion euros. Xetra and the floor at Börse Frankfurt accounted for 96 percent of the transaction volume in German equities on all stock exchanges in Germany. 89 percent of foreign equities traded on stock exchanges in Germany were traded on Xetra and on the floor in Frankfurt.
In August, 14.4 million transactions were executed on Xetra, an increase of 10 percent against the same period last year (August 2009: 13 million).
According to the Xetra liquidity measure (XLM), SAP AG was the most liquid DAX blue chip in August with 6.19 basis points (bp) for an order volume of 100,000 euros. EADS was the most liquid MDAX stock with 19.33 bp. The most liquid ETF was DB X-TR.II-EONIA T.R. 1C with 0.31 bp. The most liquid foreign stock was Royal Dutch Shell with 10.82 bp. XLM measures liquidity in electronic securities trading on the basis of the implicit transaction costs. It is expressed in basis points (1 bp = 0.01 percent); a low XLM denotes high liquidity in a security.
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Source: Deutsche Börse
New Lists of shares for calculation of RTS Index, RTS Standard Index, RTS-2 Index, RTS Siberia Index and Sectoral Indices come into effect
September 1, 2010--For the period of September 15 – December 14, 2010 new constituent lists of RTS Indices, approved by the OJSC "Russian Trading System" Stock Exchange on recommendation by the Index Committee, will come into effect.
Ordinary shares of OJSC LSR Group and V.Bank will be transferred from the waiting list to the new constituent lists of RTS Indices. They will replace ordinary shares of JSC "OPIN" and Ufaneftekhim which will be removed from the RTS Index due to the smallest capitalization of all constituents calculated on free-float basis.
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Source: RTS Exchange
EU experts sceptical of financial transactions tax
August 31, 2010-- European Union experts reached a gloomy prognosis on Tuesday for a tax on the financial sector championed by France and Germany.
In a 40-page document prepared for national officials in Brussels and seen by AFP, the European Commission examines ideas for taxes either on financial transactions, described as a "turnover tax," or on financial activity, targeting "profits and remuneration."
"Given the complexity of some financial transactions, the impact of a transaction tax and the feasibility of such a tax remain largely uncertain in many cases," the document argues.
"Given this complexity, there may be considerable unintended effects and the possibilities of circumvention of the tax increase with the complexity of the operation."
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Source: EUbusiness
Flash estimate - August 2010 Euro area inflation estimated at 1.6%
August 31, 2010--Euro area1 annual inflation2 is expected to be 1.6% in August 2010 according to a flash estimate issued by Eurostat, the statistical office of the European Union. It was 1.7% in July3.
Computation of flash estimates
Euro area inflation is measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the MUICP flash estimates, Eurostat uses early price information relating to the reference month from Member States for which data are available4 as well as early information about energy prices.
The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the euro area. No detailed breakdown is available. Experience has shown the procedure to be reliable (21 times exactly anticipating the inflation rate and 3 times differing by 0.1 over the last two years).
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Source: Eurostat
Euro area unemployment rate stable at 10.0%
EU27 stable at 9.6%
August 31, 2010--The euro area1 (EA16) seasonally-adjusted2 unemployment rate3 was 10.0% in July 2010, unchanged compared with June4. It was 9.6% in July 2009. The EU271 unemployment rate was 9.6% in July 2010, unchanged compared with June4. It was 9.1% in July 2009.
Eurostat estimates that 23.057 million men and women in the EU27, of whom 15.833 million were in the euro area, were unemployed in July 2010. Compared with June, the number of persons unemployed decreased by 45 000 in the EU27 and by 8 000 in the euro area. Compared with July 2009, unemployment rose by 1.108 million in the EU27 and by 0.668 million in the euro area.
These figures are published by Eurostat, the statistical office of the European Union.
Among the Member States, the lowest unemployment rates were recorded in Austria (3.8%) and the Netherlands (4.4% in June 2010), and the highest rates in Spain (20.3%), Latvia (20.1% in the first quarter of 2010) and Estonia (18.6% in the second quarter of 2010).
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Source: Eurostat
Europe targets commodities derivatives trade
August 31, 2010--Europe warned on Tuesday of moves to rein in commodity derivatives trading under a French-led drive to tame price distortions for raw materials ranging from oil to grain.
France launched the onslaught, calling on the European Union and the Group of 20 countries to take urgent steps to draft new common rules after a summer of fears about the fallout from soaring grain prices.
Simultaneously, the EU commissioner responsible for writing the rules governing all financial trading, former French foreign and agriculture minister Michel Barnier, said he "shares fully" the concerns in Paris.
Barnier told AFP that the "sometimes brutal" evolution of prices in commodities markets would be tackled in a series of proposals he will table to EU member states and the European parliament next month.
He said derivatives trading in energy, metals and agricultural products needs to be controlled "at a European level and a world level."
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Source: EUbusiness
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