Global ETF News Older than One Year
Patchwork financial regulation is a $780 billion drag on the economy
April 11, 2018-Fragmentation in global financial regulation costs more than
USD $780 billion annually, according to a survey released today by IFAC (International Federation of Accountants) and Business at OECD
(BIAC).
The survey, Regulatory Divergence: Costs,, Risks, Impacts: An International Financial Sector Study, examines the cost of regulatory divergence by taking the pulse of more than 250 regulatory and compliance leaders from major global financial institutions. The results quantify the massive impact of fragmented regulation: material economic costs, financial system risk, and barriers to economic growth.
http://biac.org/wp-content/uploads/2018/04/IFAC-OECD_Regulatory-Divergence_V9_singles.pdf" TARGET="_blank">view the Regulatory Divergence: Costs, Risks, Impacts: An International Financial Sector Study,
Source: BIAC
Harmonisation of critical OTC derivatives data elements (other than UTI and UPI)-technical guidance issued by CPMI-IOSCO
April 9, 2018--A new report provides technical guidance to authorities on harmonised definitions, formats and usage of a set of critical data elements for over-the-counter (OTC) derivative transactions reported to trade repositories, excluding the Unique Transaction Identifier (UTI) and the Unique Product Identifier (UPI).
Entitled Harmonisation of critical OTC derivatives data elements (other than UTI and UPI), the report is published jointly by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).
view the Harmonisation of critical OTC derivatives data elements (other than UTI and UPI)
Source: BIS
ETF Securities Weekly Flows Analysis-Safe havens gain traction as trade war escalates
April 9, 2018--Safe haven demand drives US$23.9mn into long gold ETPs and US$28.1mn into long silver ETPs.
Geopolitical risk led to US$21mn outflows from industrial metals baskets.
Long crude oil ETP inflows reach a seven-week high of US$20.6mn.
Trade wars escalate. When we first reported on the US tariffs, the Chinese retaliation was very limited, but we noted that it did not preclude further action. Last week we saw China announce a 25% tariff on 106 US goods targeting roughly US$50bn of imports (based on 2017 trade), matching the US’s target of US$50bn of Chinese imports into US. The tit-for-tat trade war has started. US President Trump then threatened a further set of tariffs on US$100bn of Chinese imports. This does not bode well for cyclical assets.
Source: etfsecurities.com
Global Debt Jumped to Record $237 Trillion Last Year
April 9, 2018--Norway, Canada, Sweden, China exceed pre-crisis debt levels
Debt as a percentage of GDP fell thanks to strong growth
Global debt rose to a record $237 trillion in the fourth quarter of 2017, more than $70 trillion higher from a decade earlier, according to an analysis by the Institute of International Finance.
Source: Bloomberg
Cracks Form in Global Growth Story, Rattling Investors
April 8, 2018--Investor confidence has flagged amid fears that a long-expected global synchronized surge may be turning into a synchronized stall
Stock-market investors, already grappling with the tech rout and the threat of a trade war, are starting to reassess a fundamental premise of the powerful rally-that world-wide economic growth is on the verge of blasting out of a long period of weakness.
The world's major economies started to pick up steam together last year, in a break from years of sluggish post-crisis growth in which the U.S. often seemed like the lone bright spot.
Source: IMF
Russell Investments Insights-2018 Global Market Outlook-Q2 update
April 6, 2018--Volatility is back, the U.S. Federal Reserve (the Fed) is picking up the pace of hiking and trade-war threats are increasing. But global growth is still strong and the U.S. economy is getting a jolt of fiscal stimulus.
The tailwinds still outweigh the headwinds for now; however, this balance could shift as the year progresses.
Key global market outlook highlights
Fiscal stimulus adding to already strong global growth momentum
Central banks becoming more hawkish, with the U.S. Federal Reserve potentially hiking four times this year
Global equities could still push higher before facing headwinds later in the year.
view the 2018 Russell Investments Shifting winds 2018 Global Market Outlook-Q2 update
Source: Russell Investments
IMF Working paper-Globalization and the New Normal
April 6, 2018--Summary:
This study expands the empirical specification of Cerra and Saxena (2008), and allows short-term output growth regimes to be determined by globalization. Relying on a non-linear dynamic panel representation, it reconciles the earlier results in the literature regarding the two opposite narratives of the effects of globalization on output growth.
Countries experience higher growth, on average, the more open and integrated they are into the world. However, once they reach a certain globalization threshold (endogenously estimated), countries may also experience a new normal, persistently lower short-term output growth following a financial crisis. The benefits, as well as vulnerabilities, accrue earlier in the globalization process for low- and middle-income countries. To solely reap the globalization benefits on growth, sound policies should be in place to mitigate the negative effects stemming from increased vulnerabilities brought by globalization.
view the IMF Working paper-Globalization and the New Normal
Source: IMF
IMF Working paper-A Primer on Managing Sovereign Debt-Portfolio Risks
April 6, 2018--This paper provides an overview of sovereign debt portfolio risks and discusses various liability management operations (LMOs) and instruments used by public debt managers to mitigate these risks. Debt management strategies analyzed in the context of helping reach debt portfolio targets and attain desired portfolio structures.
Also, the paper outlines how LMOs could be integrated into a debt management strategy and serve as policy tools to reduce potential debt portfolio vulnerabilities. Further, the paper presents operational issues faced by debt managers, including the need to develop a risk management framework, interactions of debt management with fiscal policy, monetary policy, and financial stability, as well as efficient government bond markets.
view the IMF Working paper-A Primer on Managing Sovereign Debt-Portfolio Risks
Source: IMF
IMF Working paper-Understanding the Macro-Financial Effects of Household Debt: A Global Perspective
April 6, 2018--We confirm the negative relationship between household debt and future GDP growth documented in Mian, Sufi, and Verner (2017) for a wider set of countries over the period 1950-2016. Three mutually reinforcing mechanisms help explain this relationship.
First, debt overhang impairs household consumption when negative shocks hit. Second, increases in household debt heighten the probability of future banking crises, which significantly disrupts financial intermediation. Third, crash risk may be systematically neglected due to investors' overoptimistic expectations associated with household debt booms. In addition, several institutional factors such as flexible exchange rates, higher financial development and inclusion are found to mitigate this impact. Finally, the tradeoff between financial inclusion and stability nuances downside risks to growth.
Source: IMF
DECPG Global Weekly
April 6, 2018--Taking Stock
U.S. non-farm job growth slowed in March; March PMI eased slightly. U.S. non-farm payrolls increased by 103,000 in March, well below market expectations. February's non-farm payrolls were revised up from 313,000 to 326,000.
The labor force participation rate edged down to 62.9 percent, while the unemployment was stable at 4.1 percent in February (Figure 1). Average hourly earnings rose 2.7 percent (y/y), slightly up from 2.6 percent in February. Separately, the U.S. Institute for Supply Management (ISM) service purchasing managers' index (PMI) fell to 58.8 in March from 59.5 in February. The ISM manufacturing PMI also dropped in March, to 59.3 (Figure 2), although the reading remains consistent with robust growth.
Source: World Bank
