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World Gold Council-Global gold-backed ETF holdings grew incrementally in March
April 4, 2019--Holdings in global gold-backed ETFs and similar products rose slightly in March by 3 tonnes(t) to 2,483t, equivalent to US$183mn in inflows. Global assets under management (AUM) fell by 1.6% in US dollars to US$103bn over the month, driven by the 2% decline in the price of gold during the same period.
Global gold-backed ETF flows remain positive on the year (US$1.9bn, 1.9% AUM) on the back of strong January inflows.
Regional fund flows
North American funds had inflows of 2.5t (US$104mn, 0.2% AUM)
Holdings in European funds rose fractionally by 0.3t (US$53mn, 0.1%)
Funds listed in Asia also increased slightly by 0.3t (US$17mn, 0.5%)**
Other regions were virtually flat, rising by 0.2t (US$9mn, 0.7%)
Economic Forces, Not Tariffs, Drive Changes in Trade Balances
April 3, 2019--New IMF research finds that macroeconomic factors, not tariffs, explain most of the changes in trade balances between two countries.
Bilateral trade balances (the difference in the value of exports and imports between two countries) have come under scrutiny recently.
Some policymakers are concerned that their large and rising size are the result of uneven measures that distort international trade. But is a focus on bilateral trade balances the right one?
IOSCO report on behavioural insights seeks to enhance retail investor protection
April 2, 2019--The Board of the International Organization of Securities Commissions today published a report on behavioural insights that seeks to help its members improve the effectiveness of retail investor protection.
The report, The Application of Behavioural Insights to Retail Investor Protection, provides guidance to help regulators better understand the behaviour of retail investors in making financial investment decisions.
The report describes behavioural biases and how they affect retail financial markets. The examples given in the report show how emotions and psychological experiences can influence investment decisions; how a rule of thumb can lead to incorrect beliefs; and how a partial assessment of information can lead to a different decision than a complete assessment.
The report finds that individuals tend to make different decisions when interacting with an online interface as opposed to interacting with a human or relying on print materials.
view the IOSCO The Application of Behavioural Insights to Retail Investor Protection Final Report
Bitcoin surges as cryptocurrency market suddenly springs to life
April 2, 2019--Bitcoin climbed suddenly on Tuesday to the highest level since November, leading a surge in virtual currencies and ending three months of calm in the $160 billion market.
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WTO Global trade growth loses momentum as trade tensions persist
April 2, 2019--WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019-down from 3.0% in 2018. Trade growth could then rebound to 3.0% in 2020; however, this is dependent on an easing of trade tensions.
World trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty.
Main points:
World merchandise trade volume is forecast to grow 2.6% in 2019, accompanied by GDP growth of 2.6%.
Trade growth should pick up to 3.0% in 2020 with GDP growth steady at 2.6%.
Trade growth in 2020 is expected to out-pace GDP growth due to faster GDP growth in developing economies.
Trade tensions still pose the greatest risk to the forecast, but a relaxation could provide some upside potential.
Weak import demand in Europe and Asia dampened global trade volume growth in 2018 due to the large share of these regions in world trade.
The value of merchandise trade was up 10% to US$ 19.48 trillion in 2018, partly due to higher energy prices.
Biggest banks lead the switch to blockchain
April 2, 2019--The world's largest globally systemically Important Banks (G-SIBs) are swiftly integrating blockchain technology into their operations ahead of their smaller rivals according to data released by UBS.
The Swiss bank polled 82 individuals during Q1 of 2019 from banks that are either evaluating, piloting, or implementing blockchain. The most common use cases of blockchain are payments, trade finance, securities settlement as well as fraud detection and security.
Last month, Commerzbank and Deutsche Börse announced they had used distributed ledger technology (DLT) to execute a legally binding settlement of a repo transaction. In February, a report from IHS Markit suggested that blockchain technology could save investment firms US$12 billion in clearing and settlement fees.
IMF-World Economic Outlook, Analytical Chapters, April 2019
April 3, 2019--Chapter 2: The Rise of Corporate Market Power and Its Macroeconomic Effects
This chapter investigates whether corporate market power has increased and, if so, what the macroeconomic implications are. The three main takeaways from a broad analysis of cross-country firm-level patterns are that (1) market power has increased moderately across advanced economies, as indicated by firms' price markups over marginal costs rising by close to 8 percent since 2000, but not in emerging market economies;
(2) the increase has been fairly widespread across advanced economies and industries, but within them, it has been concentrated among a small fraction of dynamic—more productive and innovative—firms; and (3) although the overall macroeconomic implications have been modest so far, further increases in the market power of these already-powerful firms could weaken investment, deter innovation, reduce labor income shares, and make it more difficult for monetary policy to stabilize output.
Chapter 3-The Price of Capital Goods: A Driver of Investment Under Threat?:
Over the past three decades, the price of machinery and equipment has fallen dramatically relative to other prices in advanced and emerging market and developing economies alike. Could rising trade tensions, a slowing pace of trade integration, and sluggish productivity growth threaten this potential driver of investment going forward? This chapter sets out to answer this question by documenting key patterns in the price of capital goods, its drivers, and its impact on real investment rates.
view the IMF WEO Analytical Chapter 3:The Price of Capital Goods: A Driver of Investment Under Threat? Chapter 4: Drivers of Bilateral Trade and Spillovers from Tariffs view the IMF WEO Analytical Chapter 4: Drivers of Bilateral Trade and Spillovers from Tariffs March 2019 FTSE Country Classification Interim Review Central Banks Are Thinking Greener as Climate Change Hits Policy BetaShares-Super Tuesday
Against this backdrop, one positive report last week was a better than expected improvement in Germany's key IFO business sentiment indicator in March. The final estimate of US Q4 annualised GDP growth was also reasonable, revealing a close-to-trend pace of 2.2%.
The presence of large and rising bilateral trade balances has raised concerns that asymmetric obstacles to trade may distort the international trade system. This chapter examines the drivers of bilateral trade balances, distinguishing between the roles of macroeconomic factors, the international division of labor, and bilateral tariffs. It also examines how, through their impact on the ways production is organized within and across countries, tariffs affect productivity, output, and employment.
April 2, 2019--Every March, FTSE Russell conducts an interim review of country classification within the FTSE Global Equity Index Series (FTSE GEIS) and all indexes derived from FTSE GEIS.
The interim review keeps investors fully informed on the status of markets currently on the Watch List (a published list of markets being considered for reclassificatio
April 2, 2019--Monetary authorities are studying how to handle changes
Financial risks and economic trouble could emerge, they worry.
At a time when students around the globe are urging governments, companies and citizens to protect the environment, awareness is growing among currency guardians that weather disruptions, carbon emissions and green finance will demand significant attention.
April 1, 2019--Week in Review
Global equities recovered somewhat last week, perhaps encouraged by the fact that while most global growth indicators have softened in recent months, they're overall still consistent with at least moderate growth (i.e. no recession) and low inflation. Central banks are also not deaf, with the Reserve Bank of New Zealand becoming the latest to turn dovish-indicating the next move in rates would now likely be down.
Bond yields continued to edge lower, with the US market now fully pricing a Fed rate cut by year-end!