Global ETF News Older than One Year
DECPG Global Weekly
June 26, 2015--Taking Stock
U.S. economy in Q1 contracted less than previously estimated, while consumer spending climbed the most in
six years in May. U.S. GDP contracted 0.2 percent (q/q saar) in Q1, less than the 0.7 percent decline previously
reported.
The upward revision was driven by stronger personal consumption, investment, and exports. Meanwhile, consumer spending jumped 0.9 percent in May, more than expected, following a revised 0.1 increase in April, reflecting in part the effects of lower gasoline prices and an improving labor market. Separately, the flash Markit manufacturing Purchasing Managers Index (PMI) for the U.S. fell to 53.4 in June, the lowest since October 2013, from 54 in May. A reading above 50 denotes expansion.
Eurozone PMI hit a four-year high in June. The flash estimate of the Markit Eurozone composite PMI reached 54.1 in June, a 49-month high, up from 53.6 in May. The latest reading was underpinned by improvements in both manufacturing and services sectors.
Source: World Bank
IMF Working paper-Does Easing Monetary Policy Increase Financial Instability?
June 26, 2015--Summary: This paper develops a model featuring both a macroeconomic and a financial friction that speaks to the interaction between monetary and macro-prudential policies. There are two main results. First, real interest rate rigidities in a monopolistic banking system have an asymmetric impact on financial stability: they increase the probability of a financial crisis (relative to the case of flexible interest rate) in response to contractionary shocks to the economy, while they act as automatic macro-prudential stabilizers in response to expansionary shocks.
Second, when the interest rate is the only available policy instrument, a monetary authority subject to the same constraints as private agents cannot always achieve a (constrained) efficient allocation and faces a trade-off between macroeconomic and financial stability in response to contractionary shocks. An implication of our analysis is that the weak link in the U.S. policy framework in the run up to the Global Recession was not excessively lax monetary policy after 2002, but rather the absence of an effective regulatory framework aimed at preserving financial stability.
view the IMF Working paper-Does Easing Monetary Policy Increase Financial Instability?
Source: IMF
Shanghai Gold Exchange in Talks With CME to List Contracts
June 25, 2015--The Shanghai Gold Exchange is in discussions with the CME Group Inc. about listing each other's contracts on their respective exchanges, according to Shen Gang, vice president of the SGE.
The Shanghai gold bourse will list contracts and prices on the CME in the first phase of the cooperation, Shen said Thursday at a conference in Shanghai.
Source: Bloomberg
IMF Work Agenda Aims to Lift Global Growth, Address New Risks
June 25, 2015--Fostering global growth-both actual and potential-is a key priority
Addressing financial stability risks remains important challenge
Agenda stresses multilateral cooperation on cross-cutting issues
The IMF has published a new work program that aims to diminish risks and tackle emerging global challenges to help bolster actual and potential growth.
Source: IMF
IMF Working paper-Estimation and out-of-sample Prediction of Sudden Stops:Do Regions of Emerging Markets Behave Differently from Each Other?
June 25, 2015--Summary: We identify episodes of sudden stops in emerging economies and estimate the probability to observe them. Sudden stops are more likely when global growth falters, risk aversion in financial markets rises, and vulnerabilities in the external and financial sectors increase.
However, the significance of the explanatory variables vary across regions. In Latin America and Eastern Europe, gross capital inflows are more responsive to changes in global growth than in Asia. Trade linkages tend to be more important than financial linkages in Eastern Europe, while in Asia and Latin America the opposite is true. The model captures only a third of sudden stops outside the estimation sample, but issues reliable sudden stop signals.
Source: IMF
Infographic: Development Solutions for Disaster Risk Finance
June 25, 2015--This infographic gives an overview of the high cost of disasters on national and local governments, businesses and households- including farmers, herders, homeowners- and the most vulnerable.
It also highlights solutions that have been implemented in several regions with support of the Disaster Risk Financing and Insurance (DRFI) Program, a partnership of the World Bank Group and the Global Facility for Disaster reduction and Recovery (GFDRR). view infographic
Source: World Bank
Fed's looming rate rise is bad news for bonds
June 24, 2015--Another day, another missed Greek deadline. Those who no longer have the energy to worry about the eurozone periphery can express their concerns about the US Federal Reserve's impending rate rises, instead.
It is nine years since the Fed last hiked rates, and traders think it will move before the end of the year
Source: FT.com
IOSCO Consults on Elements of Intern, Regulatory Standards on Fees and Expenses of Investment Funds
June 24, 2015--The International Organization of Securities Commissions today published the consultation report on Elements of International Regulatory Standards on Fees and Expenses of Investment Funds, which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes (CIS) and regulators to consider.
This consultation report builds on the recommendations made in the 2004 paper on International Regulatory Standards on Fees and Expenses of Investment Funds. It seeks to determine whether these standards are still valid or might be updated or supplemented in light of market and regulatory changes.
Source: IOSCO
BlackRock Boosts China Debt Holdings With Focus on Quality Bonds
June 24, 2015--BlackRock Inc., the world's biggest money manager,said it's been raising its stake in China's bond market as policy makers tackle corruption, runaway debt and an economic slowdown.
"We've been increasing over the course of this year," Neeraj Seth, the Singapore-based head of Asian credit, said at a briefing Wednesday.
Source: Bloomberg
Low interest rates threaten solvency of pension funds and insurers
June 24, 2015--The current low interest rate environment poses a significant risk for the long-term financial viability of pension funds and insurance companies, as they seek to generate sufficient returns to meet promises, according to a new OECD report.
The inaugural edition of the OECD Business and Finance Outlook says the main concern is that pension funds and life insurance companies might become involved in the "search for yield" in order to match the levels of returns promised to policyholders and beneficiaries when interest rate were higher. This poses risks including insolvency.
view the OECD Business and Finance Outlook 2015
Source: OECD
