Global ETF News Older than One Year
IMF Working Papers-The Distribution of Gains from Globalization
March 13, 2018--Summary:
We study economic globalization as a multidimensional process and investigate its effect on incomes. In a panel of 147 countries during 1970-2014, we apply a new instrumental variable, exploiting globalization's geographically diffusive character, and find differential gains from globalization both across and within countries:
Income gains are substantial for countries at early and medium stages of the globalization process, but the marginal returns diminish as globalization rises, eventually becoming insignificant.
Within countries, these gains are concentrated at the top of national income distributions, resulting in rising inequality. We find that domestic policies can mitigate the adverse distributional effects of globalization.
view the IMF Working Papers-The Distribution of Gains from Globalization
Source: IMF
BIS Central bank digital currencies
March 12, 2018-- Central banks must carefully weigh the implications for financial stability and monetary policy of issuing digital currencies, according to a report from the Committee on Payments and Market Infrastructures (CPMI) and the Markets Committee.
The report considers a wholesale CBDC (for use in financial markets), and a general purpose CBDC (for use by the general public) and their implications for payments, monetary policy and financial stability.
It finds that wholesale CBDCs might be useful for payments but more work is needed to assess the full potential. Although a CBDC would not alter the basic mechanics of monetary policy implementation, its transmission could be affected.
view the BIS Central Bank Digital Currencies Report
Source: BIS
Volatility drives first ETF outflows in two years
March 12, 2018--The blast of volatility that shook Wall Street in February drove investors to pull money from exchange traded funds that track US equities for the first time in two years.
The US withdrawals have raised questions over whether the ETF industry can sustain its breakneck pace of expansion after four consecutive...
Source: FT.com
IMF Working Papers-Growth Accelerations and Reversals in Emerging Market and Developing Economies: The Role of External Conditions
March 12, 2018--Summary:
This paper investigates how country-specific external demand, external financial conditions, and terms of trade affect medium-term growth in Emerging Market and Developing Economies and the occurrence of growth accelerations and reversals.
The importance of country-specific external conditions for medium-term growth has increased over time-in particular, the growing contribution of external financial conditions accounts for one-third of the increase in average income per capita growth between 1995–2004 and 2005–14. Stronger external demand and financial conditions significantly increase the probability of growth accelerations, while a strengthening of any of the three conditions significantly decreases the probability of reversals.
Source: IMF
IOSCO seeks to protect senior investors from financial fraud, unsuitable investments and other risks
March 12, 2018--The Board of the International Organization of Securities Commissions has published today a report that examines the growing vulnerability of ageing investors to financial fraud and other risks and identifies sound practices for enhancing their protection.
The report Senior Investor Vulnerability reveals that seniors are at a higher risk than other investors of losing money to fraud or of being misled by others. It also indicates that the biggest risks to senior investors are unsuitable investments, financial fraud and their diminished cognitive capability which affects their financial decision-making. Complex products, deficient financial literacy, and social isolation pose additional risks to senior investors.
view the IOSCO Senior Investor Vulnerability Final Report
Source: IOSCO
ETF Securities Weekly Flows Analysis Investors appear to shrug off trade-war risk for now
March 12, 2018--Inflows into industrial metal baskets of US$9mn highlights cyclical optimism as investors appear to shrug off threats of a trade-war.
Gold ETPs attracted USD14.5mn, marking the first substantial inflow in six weeks.
Cocoa rally sparks profit taking.
Inflows into industrial metal baskets of US$9mn highlights cyclical optimism as investors appear to shrug off threats of a trade-war. Although base metal prices fell last week after the Trump Administration applied tariffs to imports of steel and aluminium in the US, many ETP investors shrugged off the event.
The tariffs could tighten the supply of metal coming from China. As a serial overproducer, cutbacks from China would be welcome news and could even increase prices; China is already trying to reduce capacity in steel and aluminium and this should push the country further along in its efforts. The impact on the broader commodity complex will largely depend on the reaction from other countries.
Source: etfsecurities.com
March 2018 BIS Quarterly Review: Volatility returns to centre stage after stock market wobble
March 11, 2018--Volatility returned to markets in February, puncturing a long period of unusual calm and highlighting the tricky task central banks face in normalising accommodative monetary policies.
The sharp correction in stock markets was sparked by anxiety about the US inflation outlook and its likely impact on interest rates, and shows how much risk market participants have taken on during the recent period of extraordinarily low volatility.
"No doubt, the wobble has shaken off some positions-the equivalent of pressing a 'reset' button. But the overall picture has not fundamentally changed," said Claudio Borio, Head of the Monetary and Economic Department of the BIS.
"Policymakers need not fear volatility as such. Along the normalisation path, some volatility can be their friend."
The March 2018 issue of the Quarterly Review also:
Examines the 5 February turbulence and the role played by exchange-traded products that bet on volatility. It highlights that complex and leveraged products can create and amplify market jumps, even if the core players themselves are relatively small.
view the BIS Quarterly Review, March 2018
Source: BIS
Watchdogs tighten their grip on cryptocurrency exchanges
March 10, 2018--Japan and US regulators send tougher message to the industry
Financial watchdogs tightened their hold on the nascent cryptocurrency industry this week, in the latest sign that regulators are moving to restrain a freewheeling market that has drawn in retail investors.
Japan ordered two cryptocurrency exchanges -Bitstation and FSHO-to stop doing business for a month and ordered five others to improve their internal controls.
Source: FT.com
ETF Securities Investment Insights Platinum Outlook-Shining Through Diesel Drama
March 9, 2018--Summary
Leadership change sparked positive shift in economic outlook
for South Africa, the largest platinum producer, and the Rand.
Millennials may remain key for platinum jewelry growth.
Platinum prices may average $1040/ounce (oz) this year.
Platinum's narrative seems inextricably linked to negative diesel sentiment in Europe, where the share of diesel vehicles fell from 50% to 44% in 2017. European auto demand, however, accounts for only 27% of annual platinum demand, and markets may be overlooking the impact that retrofitting vehicles in Europe along with higher diesel emissions standards enacted in China may have on platinum demand. While the shift away from diesel does perpetuate strategic headwinds for platinum, the slowdown in this segment is not the only driver for platinum prices in 2018.
Source: etfsecurities.com
DECPG Global Weekly
March 9, 2018--Taking Stock
U.S. nonfarm payrolls surged in February, trade deficit rose to a near-decade high in January. Monthly nonfarm payrolls gains accelerated to 313,000 in February from an upwardly revised 239,000 in January.
The unemployment rate remained unchanged at 4.1 percent in February (Figure 1), while the participation rate rose to 63 percent from 62.7 percent. Average hourly earnings growth slowed to 2.6 percent (y/y) in February from a downwardly revised 2.8 percent in January. The trade deficit increased from US$53.9bn in December to US$56.6bn in January, its highest level since October 2008, as exports fell 1.3 percent (m/m), while the level of imports was flat. The administration announced new import tariffs on steel and aluminum, with temporary exemptions for Canada and Mexico.
