DECPG Global Weekly
February 16, 2018--TAKING STOCK
U.S. consumer price inflation exceeded expectations in January; retail sales and industrial production fell
Euro Area industrial production rose in December; GDP growth reached a 10-year high in 2017
Japan's GDP growth slowed in the fourth quarter of 2017
Inflation among large oil producers in Sub-Saharan Africa slowed in January
Oil prices rebounded
U.S. consumer price inflation exceeded expectations in January; retail sales and industrial production fell. The U.S. headline consumer price index (CPI) rose 2.1 percent (y/y) in January (Figure 1), the same as in December, but above the market expectations of a 1.9 percent increase. The 1.8 percent (y/y) increase in core CPI-which excludes food and energy prices-was also unchanged from December, and stronger than the market expectations of a 1.7 percent increase.
Meanwhile, retail sales fell 0.3 percent (m/m sa) in January, the largest monthly drop since February 2017, as consumers cut back on purchases of cars and building materials.
Source: World Bank
Change of Urban Population in Europe and Central Asia
February 14, 2018--The urbanization experience of countries across Eastern Europe and Central Asia is profoundly affected by demographic transition over the last 25 years. By 1990, about 68% of the population in the region lived in urban areas.
Source: World Bank
IOSCO consults on proposed policy measures to protect investors of OTC leveraged products
February 13, 2018--The International Organization of Securities Commissions (IOSCO) has issued today a consultation report proposing policy measures for its members to consider when addressing the risks arising from the offer and sale of OTC leveraged products to retail clients.
The Report on Retail OTC Leveraged Products identifies various regulatory approaches aimed at enhancing the protection of retail investors who are offered OTC leveraged products, often on a cross-border basis. The report covers the offer and sale by intermediaries of rolling-spot forex contracts, contracts for differences (CFDs), and binary options. Intermediaries market and sell these products to retail investors in most IOSCO member jurisdictions.
view the Report on Retail OTC Leveraged Products Consultation Report
Source: IOSCO
IEA-OMR: History repeating itself?
February 13, 2018--This month's OMR is abbreviated to allow time for us to complete our annual five-year outlook that will be published in our report Oil 2018 on 5 March. Meanwhile, new and revised data shows a modest tightening of the balance in the early part of 2018, but the main message remains unchanged from last month and it is very clear: in 2018, fast rising production in non-OPEC countries, led by the US, is likely to grow by more than demand.
For now, the upward momentum that drove the price of Brent crude oil to $70/bbl has stalled; partly due to investors taking profits, but also as part of the corrections we have seen recently in many markets. Most importantly, the underlying oil market fundamentals in the early part of 2018 look less supportive for prices.
view the IEA Oil Market Report
Source: International Energy Agency (IEA)
ETF Securities Weekly Flows Analysis-ETF investors see silver lining in equity storm
February 12, 2018--February 12, 2018--A rout in cyclical markets set off a pronounced sell-off in commodities, including industrial metals, oil and gold.
ETF investors however, saw an opportunity to buy equities following price declines.
Record US oil production continues to weigh on oil.
Industrial metals ETPs saw US$99.9mn outflows. Arguably the most cyclically exposed of the commodities-industrial metals-experienced the highest outflows in 10 weeks. An equity market sell-off dragged other cyclical assets lower. Most of the outflows were concentrated in broad baskets (-US$133.6mn) and copper (-US$26.3mn). However, there were inflows into nickel (US$61.3mn) and silver (US19.3mn), highlighting that some investors are tactically searching for opportunities after the price decline.
Source: etfsecurities.com
ETF market smashes through $5tn barrier after record month
February 11, 2018--Tectonic shift causes profound changes across global asset management industry
Investors ploughed more than $100bn in new cash into exchange traded funds in January, a record monthly inflow that helped drive assets held in ETFs globally above the $5tn mark for the first time. The surge in January follows four consecutive years of record breaking inflows into ETFs, a tectonic shift that is sending shockwaves across the entire asset management industry.
Source: FT.com
DECPG Global Weekly
February 9, 2018--TAKING STOCK
Global equity markets reversed year-to-date gains
U.S. trade deficit rose to near-decade high; services activity was strong in January
Euro Area retail sales moderated in December; Composite PMI increased in January
China's merchandise trade surplus narrowed in January; Composite PMI improved
Composite PMI improved in Brazil; weakened in Russia and India
Global equity markets reversed year-to-date gains. Following significant global equity market gains in January, all year-to-date returns were wiped away from February 2 to February 9, as the market reassessed inflationary pressures in the United States-triggered by January’s strong U.S. wage growth data-and equity valuations globally. The U.S. Dow Jones Industrial Average and S&P 500, as well as the MSCI emerging market index, lost roughly 8 percent.
Source: World Bank
IMF Working paper-Commodity-based Sovereign Wealth Funds: Managing Financial Flows in the Context of the Sovereign Balance Sheet
February 9, 2018--Summary:
Commodity-based sovereign wealth funds (SWFs) have been at a crossroads following the recent fall in commodity prices.
This paper provides a framework for commodity-based SWF management, focusing on stabilization and savings funds, by (i) examining macrofiscal linkages for SWFs; (ii) presenting an integrated sovereign asset and liability management (SALM) approach to SWF management; and (iii) applying this framework to a scenario where assets are being accumulated and to a scenario where the SWF is drawn on to cover a financing gap due to lower commodity prices.
Source: IMF
High-Speed Traders Savor Volatility as Rest of Market Is Crushed
February 9, 2018--Virtu, Flow's shares soar after being stuck in the doldrums
Heavy volume and volatile markets are ideal for trading firms
Happy days are here again for high-frequency traders.
In a week where scores of companies around the world saw their stocks buried in red, two of the major middlemen in modern, high-speed electronic trading are basking in the sun of volatility. Virtu Financial Inc. and Flow Traders NV both surged more than 40 percent since last Friday.
Source: Bloomberg
Solactive No. 1 Index Provider for ETF Launches in January
February 9, 2018--Close to 50% of ETF launches in the first month of 2018 rely on Solactive services
This year has started strong for Solactive and the ETF industry. The German index engineer has achieved a record number of index-linked launches, making it the number one provider of indices for ETFs in January 2018.
With 55 ETF launches globally, 25 have involved Solactive as either creator, calculator, or administrator of the underlying index. ETF launches have covered both the equity and fixed-income spaces, and have involved a wide array of strategies including broad-based benchmark solutions and more niche strategies, such as smart beta or thematic indices.
Source: Solactive