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Mind the $400 trillion pensions gap
June 13, 2019--There is no quick fix to the global pensions crisis. Many people simply do not save enough for their old age, while government pension schemes face unprecedented strains.
A new World Economic Forum report gives examples of fresh thinking from around the world, showing the financial services industry and policy-makers how to step up.
view the World Economic Forum Investing in (and for) Our Future White Paper
Global Foreign Direct Investment Slides for Third Consecutive Year-United Nations Report
June 12, 2019--Contraction largely caused by US multinationals repatriating earnings from abroad
Global foreign direct investment (FDI) flows slid by 13% in 2018, to US$1.3 trillion from $1.5 trillion the previous year-the third consecutive annual decline, according to UNCTAD's World Investment Report 2019.
The contraction was largely precipitated by United States multinational enterprises (MNEs) repatriating earnings from abroad, making use of tax reforms introduced by the country in 2017, designed for that purpose.
Hardest hit by the earnings repatriation were developed countries, where flows fell by a quarter to $557 billion-levels last seen in 2004.
view the UN World Investment Report 2019
Santorum-Backed Catholic Blockchain Looks To Entice Younger Users To Crypt. Wait. Crypto.
It's even worse than you think, and that's saying something.
June 11, 2019--Every time you think the craziest moments in crypto are behind you, another ghost of 2017 returns to haunt the cryptocurrency markets.
We've already seen the improbable resurrections of BitConnect and Mark Karpeles. Now, one of the ghosts of the 2016 presidential campaign has been resurrected to help launch a cryptocurrency.
Rick Santorum, who is best known for making Donald Trump look sane and reasonable*, has now joined the crowded ranks of cryptocurrency advisors. In addition to haunting the nightmares of Democrats, Santorum is now moonlighting as an advisor to Cathio: the Catholic Blockchain.
Steampunk Settlement-Futuristic DLT Technology Could Deliver Anachronistic Result
June 11, 2019--Distributed ledger technology (DLT) will have a profound effect on clearing and settlement, but taken too far, it might actually turn the clock backward and reintroduce problems financial markets have been working to alleviate for more than 500 years.
"DLT has great potential to enhance the existing system," says Ken Monahan, Senior Analyst for Greenwich Associates Market Structure and Technology and author of Steampunk Settlement: Deploying Futuristic Technology to Achieve an Anachronistic Result. "But in reality, the technology is evolutionary, not revolutionary, and attempting to replace the clearing infrastructure with this technology is to carry the system not into the future, but into the past."
FTSE Russell The 2019 Smart Beta Survey of Asset Owners result are in
June 10, 2019--Now in its sixth year, the FTSE Russell global institutional surveys provide unique insight into major trends in awareness, popularity and the use of smart beta among global asset owners.
This year we have produced an additional report that examines the integration of ESG into smart beta strategies by asset owners.
Key findings:
78% of survey respondents have implemented, are currently evaluating, or plan to evaluate smart beta strategies
YoY adoption of smart beta strategies has increased by 18% to 60% in North America
Over 75% of European asset owners evaluating or using smart beta expect to apply ESG considerations to smart beta, while only 17% of North American asset owners do
Among those who anticipate applying ESG considerations to a smart beta strategy, over three-quarters are now motivated by avoiding long term risk compared to a little over half just last year.
Keeping the Wheels of Commerce Turning
June 10, 2019--The tariff disputes roiling markets are a reminder that the global system of free trade, which has delivered so much prosperity, is a fragile one.
We all know what happened in the 1930s, when trade wars only served to deepen the misery inflicted by the Great Depression.
That is why, after World War II, countries agreed to gradually reduce tariffs.
But many continued to restrict flows of goods across borders in other ways as they sought to give their domestic industries an edge over foreign competitors.
One common method was to impose different exchange rates for different kinds of transactions in a bid to stimulate exports and discourage imports. That is one example of what is known as a multiple currency practice, or MCP. Another is to offer favorable exchange rates to selected industries.
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ECB Working Paper-Competition among high-frequency traders, and market quality
June 10, 2019--1 Introduction
High-frequency traders (HFTs) are market participants that are characterized by the high speed with which they react to incoming news, the low inventory on their books, and the large number of trades they execute (SEC (2010)). The high-frequency trading industry grew rapidly since its inception in the mid-2000s and today high-frequency trading represents about 50% of trading in US equity markets (down from a 2009 peak, when it topped 60%; see report of the TABB Group, 2017).
A distinguishing feature of the high-frequency industry is fierce competition (see, e.g., Wall Street Journal, 2017). While existing empirical research focuses on the general effects of high-frequency trading on market liquidity, price discovery and volatility, the question of how
competition among HFTs affects market quality and market dynamics is largely unaddressed. Recent theoretical models predict that competition among HFTs can harm market liquidity.
Humans beat machines in rocky month for equities
June 9, 2019--Humans beat machines in rocky month for equities. Traditional stockpicking fund managers have enjoyed an unusually good stretch in recent weeks even as machine-driven "quant" funds have fizzled, nurturing hopes that rockier markets may help human investors launch a comeback.
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57 Carbon Pricing Initiatives Now in Place Globally, Latest World Bank Report Finds
June 7, 2019--Carbon pricing policies continue to make headway, but coverage and the price levels are still insufficient.
57 carbon pricing initiatives are now implemented or scheduled for implementation globally, up from 51 in April 2018 according to the annual State and Trends of Carbon Pricing report launched today at the Innovate4Climate conference in Singapore.
The report, which presents the latest developments of carbon pricing around the world, finds that in the past year new carbon pricing initiatives continued to emerge, mostly at the subnational level and in the Americas. These include new carbon pricing initiatives in Canadian provinces and territories, driven by Canada's federal carbon pricing approach. At the national level, initiatives were launched in Argentina, South Africa, and Singapore; and countries exploring new or complimentary policies include Colombia, Mexico, the Netherlands, Senegal, Ukraine, and Vietnam.
view the State and Trends of Carbon Pricing 2019 report
FTSE Russell-Uncovering fixed income factors. The concept of 'carry'
June 7, 2019-The concept of "carry" is not new and has been leveraged in the currency markets for decades. More recently, however, academic publications have further explored this concept cross-markets and showcased evidence of the carry premium across other asset classes.
Our latest research paper, "The Carry Concept"-the second in our latest series of fixed income factor research-provides an in-depth analysis of the carry concept in bond markets.
In the paper we explore;
The 'carry' concept
Targeting 'carry' in sovereign markets
Extending 'carry' to corporate bonds
Real world utilization
As a well-known concept to practitioners and academics, carry has been leveraged in the currency markets for decades. With the understanding of such FX carry trades becoming established, recent academic publications have explored this concept cross-markets and showcased evidence of the carry premium across other asset classes.
