Global ETF News For The Past Year
Bassanese Bites-Breather
May 26, 2024--Global markets-week in review
After four consecutive weekly gains, global equities took a breather last week with the S&P 500 inching ahead only 0.03%. Firm US service sector data and "high for longer" Fed rhetoric saw traders take profits in both the bond and equity markets after recent gains.
Probably the main highlight in a data-light week was the strength in the US services sector PMI. The S&P US service sector index blew past market expectations, rising to 54.4 from 51.1. Also concerning was a lift in input costs. The result ran counter to a run of recent softer reports for employment growth and retail sales. Overall, the US economy remains firm, though whether this necessarily implies inflation will prove stubbornly firm remains to be seen.
ETFs shift from 'core' to 'satellite' in portfolios
May 23, 2024-- BBH survey indicates the funds are increasingly vehicles of choice for active strategies and tactical short-term use
Exchange traded funds are increasingly vehicles of choice for active strategies and for tactical short-term use, a new study reveals, underlining how much has changed from their buy-and-hold, broad market historical origins.
Actively managed ETFs that guarantee protection against losses, leveraged or inverse strategies that reset daily and cryptocurrency investments, topped the list of ETF strategies that appealed most to investors in the US, Europe, China, Hong Kong and Taiwan, according to the latest Brown Brothers Harriman survey of more than 300 institutional investors globally.
Amundi ETF Market Strategy-Weekly Pulse
May 17, 2024--Risk assets extended gains and hovered near record highs. A further deceleration in inflation revived hopes that both the US Federal Reserve and the European Central Bank (ECB) are heading closer to a pivot in monetary policy.
Treasuries rallied across the board and the US dollar weakened. Flows were primarily directed into government
bond exposures and high yield debt.
Japan and EM exposures were favoured within equities.
PREDICTABILITY WITH FIXED MATURITY
Navigating the ECB's future policy rates path:
The final inflation release for April indicated continued disinflation in the euro area, clearing the way for the
central bank to start cutting rates in June.
ETF buying nearly halves in April as US rate cut hopes recede
May 9, 2024--Aversion to risk spurs sharp fall to equity ETFs while government bond ETF flows tick up
Investors pulled in their horns in April as diminishing prospects for near-term US interest rate cuts drove a broad aversion to risk, global data on exchange traded fund flows indicate.
However, there were still signs of animal spirits in some corners of the global market with solid demand for some cyclical assets, such as European and Japanese equities and emerging market debt.
Global Commodity Prices Level Off, Hurting Prospects for Lower Inflation
April 25, 2024--Major flare-up in Middle-East conflict could stoke global inflation
Global commodity prices are leveling off after a steep descent that played a decisive role in whittling down overall inflation last year, which could make it harder for central banks to cut interest rates quickly, according to the World Bank's latest Commodity Markets Outlook. The report also finds that a major outbreak of conflict in the Middle East could halt the inflationary decline that has occurred over the past two years.
Between mid-2022 and mid-2023, global commodity prices plummeted by nearly 40%. This helped to drive most of the roughly 2-percentage-point reduction in global inflation between 2022 and 2023. Since mid-2023, however, the World Bank's index of commodity prices has remained essentially unchanged. Assuming no further flare-up in geopolitical tensions, the Bank's forecasts call for a decline of 3% in global commodity prices in 2024 and 4% in 2025. That pace will do little to subdue inflation that remains above central bank targets in most countries. It will keep commodity prices about 38% higher than they were on average in the five years before the COVID-19 pandemic.
China continues to dominate an expanded BRICS
April 12, 2024--In Brief
China's economic size and increasing assertiveness in foreign policy give it a dominant position in BRICS, which is reflected in intra-bloc trade flows and in the bloc's foreign policy positions. The future of BRICS is uncertain given its heavy dependence on China's economic future and the deteriorating sentiment towards China among its members. India's fast growth and increasing geopolitical heft also pose a challenge for the continuation of BRICS as a China-centric grouping.
The origins of BRICS -a bloc comprising Brazil, Russia, India, China, South Africa and, as of 2024, new members Egypt, Ethiopia, Iran and the United Arab Emirates -can be traced back to a 2001 publication by Goldman Sachs economist Jim O’Neill titled 'Building Better Global Economic BRICs'. O'Neill argued that Brazil, Russia, India and China were poised to play an increasingly significant role in the global economy.
His prediction was that by 2050, these countries would collectively account for 40 per cent of the world's economic output. In reality, from 2012 to 2022 China alone has accounted for around a quarter of global GDP growth, and the BRICS countries together contributed over 45 per cent.
Trade growth likely to pick up in 2024 in spite of challenging environment
April 12, 2024--The latest edition of the WTO's "Global Trade Outlook and Statistics" foresees a gradual recovery in world merchandise trade volume in 2024 and 2025. This follows a contraction in 2023 driven by the lingering effects of high energy prices and inflation in advanced economies, particularly Europe. So, what does our forecast indicate?
Specifically, we expect merchandise trade to grow by 2,6% in 2024 and 3,3% in 2025 after falling by 1,2% in 2023, However, there is a downside risk due to regional conflicts, geopolitical tensions and economic policy uncertainty,
In value terms, merchandise trade fell 5% in 2023 to US$ 24,01 trillion but the decline was mostly offset by a 9% increase in commercial services trade, which reached around US$ 7,54 trillion, Total goods and services trade was only down 2%,
A particularly bright spot for services was the global exports of digitally delivered services, which reached US$ 4,25 trillion in 2023, up 9% year-on-year, accounting for 13,8% of world exports of goods and services,
WTO forecasts rebound in global trade but warns of downside risks
April 10, 2024--Global goods trade is expected to pick up gradually this year following a contraction in 2023 that was driven by the lingering effects of high energy prices and inflation, WTO economists said in a new forecast on 10 April. The volume of world merchandise trade should increase by 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023. However, regional conflicts, geopolitical tensions and economic policy uncertainty pose substantial downside risks to the forecast.
In the latest "Global Trade Outlook and Statistics" report, WTO economists note that inflationary pressures are expected to abate this year, allowing real incomes to grow again-particularly in advanced economies- thus providing a boost to the consumption of manufactured goods. A recovery of demand for tradable goods in 2024 is already evident, with indices of new export orders pointing to improving conditions for trade at the start of the year.
Emerging Markets Are Exercising Greater Global Sway
April 9, 2024--Policymakers must be ready to manage greater spillovers to the global economy as emerging markets' influence grows
The global economy is increasingly influenced by the Group of Twenty's large emerging markets. Over the past two decades, these economies have become much more integrated with global markets and are generating larger economic "spillovers" to the rest of the world.
At a time when growth prospects are weakening in China and several other large emerging markets, it is critical for policymakers-both in G20 emerging markets and those countries that could be impacted-to understand the channels through which a slowdown could propagate through the global economy.
Growth spillovers from domestic shocks in G20 emerging markets have increased over the past two decades and are now comparable to those from advanced economies, as we detail in an analytical chapter of the April 2024 World Economic Outlook. We also examine how such shocks spread through trade to companies and industries in other countries.
Rising Cyber Threats Pose Serious Concerns for Financial Stability
April 9, 2024--Greater digitalization and heightened geopolitical tensions imply that the risk of a cyberattack with systemic consequences has risen
Cyberattacks have more than doubled since the pandemic. While companies have historically suffered relatively modest direct losses from cyberattacks, some have experienced a much heavier toll.
US credit reporting agency Equifax, for example, paid more than $1 billion in penalties after a major data breach in 2017 that affected about 150 million consumers.
As we show in a chapter of the April 2024
Global Financial Stability Report, the risk of extreme losses from cyber incidents is increasing. Such losses could potentially cause funding problems for companies and even jeopardize their solvency. The size of these extreme losses has more than quadrupled since 2017 to $2.5 billion. And indirect losses like reputational damage or security upgrades are substantially higher.