Global ETF News Older than One Year
WTO forecasts rebound in global trade but warns of downside risks
April 10, 2024--Global goods trade is expected to pick up gradually this year following a contraction in 2023 that was driven by the lingering effects of high energy prices and inflation, WTO economists said in a new forecast on 10 April. The volume of world merchandise trade should increase by 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023. However, regional conflicts, geopolitical tensions and economic policy uncertainty pose substantial downside risks to the forecast.
In the latest "Global Trade Outlook and Statistics" report, WTO economists note that inflationary pressures are expected to abate this year, allowing real incomes to grow again-particularly in advanced economies- thus providing a boost to the consumption of manufactured goods. A recovery of demand for tradable goods in 2024 is already evident, with indices of new export orders pointing to improving conditions for trade at the start of the year.
Source: wto.org
Emerging Markets Are Exercising Greater Global Sway
April 9, 2024--Policymakers must be ready to manage greater spillovers to the global economy as emerging markets' influence grows
The global economy is increasingly influenced by the Group of Twenty's large emerging markets. Over the past two decades, these economies have become much more integrated with global markets and are generating larger economic "spillovers" to the rest of the world.
At a time when growth prospects are weakening in China and several other large emerging markets, it is critical for policymakers-both in G20 emerging markets and those countries that could be impacted-to understand the channels through which a slowdown could propagate through the global economy.
Growth spillovers from domestic shocks in G20 emerging markets have increased over the past two decades and are now comparable to those from advanced economies, as we detail in an analytical chapter of the April 2024 World Economic Outlook. We also examine how such shocks spread through trade to companies and industries in other countries.
Source: imf.org
Rising Cyber Threats Pose Serious Concerns for Financial Stability
April 9, 2024--Greater digitalization and heightened geopolitical tensions imply that the risk of a cyberattack with systemic consequences has risen
Cyberattacks have more than doubled since the pandemic. While companies have historically suffered relatively modest direct losses from cyberattacks, some have experienced a much heavier toll.
US credit reporting agency Equifax, for example, paid more than $1 billion in penalties after a major data breach in 2017 that affected about 150 million consumers.
As we show in a chapter of the April 2024
Global Financial Stability Report, the risk of extreme losses from cyber incidents is increasing. Such losses could potentially cause funding problems for companies and even jeopardize their solvency. The size of these extreme losses has more than quadrupled since 2017 to $2.5 billion. And indirect losses like reputational damage or security upgrades are substantially higher.
Source: imf.org
Fast-Growing $2 Trillion Private Credit Market Warrants Closer Watch
April 8, 2024--Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight
The private credit market, in which specialized non-bank financial institutions such as investment funds lend to corporate borrowers, topped $2.1 trillion globally last year in assets and committed capital.
About three-quarters of this was in the United States, where its market share is nearing that of syndicated loans and high-yield bonds.
This market emerged about three decades ago as a financing source for companies too large or risky for commercial banks and too small to raise debt in public markets. In the past few years, it has grown rapidly as features such as, speed, flexibility, and attentiveness have proved valuable to borrowers. Institutional investors such as pension funds and insurance companies have eagerly invested in funds that, though illiquid, offered higher returns and less volatility.
Source: imf.org
Housing is One Reason Not All Countries Feel Same Pinch of Higher Interest Rates
April 8, 2024--Effects may be delayed in some countries: if interest rates remain higher for longer, homeowners will likely feel their effects as mortgage rates adjust
Central banks have raised interest rates significantly over the past two years to combat post-pandemic inflation. Many thought this would lead to a slowdown in economic activity. Yet, global growth has held broadly steady, with deceleration only materializing in some countries.
Why are some feeling the pinch from higher rates and not others? The answer partly lies in differences in mortgage and housing market characteristics. The effects of rising monetary policy rates on activity partly depend on housing and mortgage market characteristics, which vary significantly across countries, as we show in a chapter of our latest World Economic Outlook.
Source: imf.org
Fast-Growing $2 Trillion Private Credit Market Warrants Closer Watch
April 8, 2024--Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight
The private credit market, in which specialized non-bank financial institutions such as investment funds lend to corporate borrowers, topped $2.1 trillion globally last year in assets and committed capital.
About three-quarters of this was in the United States, where its market share is nearing that of syndicated loans and high-yield bonds.
This market emerged about three decades ago as a financing source for companies too large or risky for commercial banks and too small to raise debt in public markets. In the past few years, it has grown rapidly as features such as, speed, flexibility, and attentiveness have proved valuable to borrowers. Institutional investors such as pension funds and insurance companies have eagerly invested in funds that, though illiquid, offered higher returns and less volatility.
Source: imf.org
IMF Working Paper-Changing Global Linkages: A New Cold War?
April 5, 2024--Summary:
Global linkages are changing amidst elevated geopolitical tensions and a surge in policies directed at increasing supply chain resilience and national security. Using granular bilateral data, this paper provides new evidence of trade and investment fragmentation along geopolitical lines since Russia's invasion of Ukraine, and compares it to the historical experience of the early years of the Cold War.
Gravity model estimates point to significant declines in trade and FDI flows between countries in geopolitically distant blocs since the onset of the war in Ukraine, relative to flows between countries in the same bloc (roughly 12% and 20%, respectively). While the extent of fragmentation is still relatively small and we do not know how longlasting it will be, the decoupling between the rival geopolitical blocs during the Cold War suggests it could worsen considerably should geopolitical tensions persist and trade restrictive policies intensify. Different from the early years of the Cold War, a set of nonaligned ‘connector’ countries are rapidly gaining importance and serving as a bridge between blocs. The emergence of connectors has likely brought resilience to global trade and activity, but does not necessarily increase diversification, strengthen supply chains, or lessen strategic dependence.
Source: imf.org
IMF-Gender and Business Cycles
April 4, 2024-This note reviews the literature on the complex relationship between gender and business cycles. It focuses on nuanced patterns that challenge the notion of gender neutrality in economic fluctuations.
The note also analyzes dimensions, such as unemployment, income risk, hours worked, and responses to monetary and fiscal policy shocks, and documents distinctive disparities.
For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.
Source: imf.org
Cboe Global Listings Reaches New Milestone Surpassing 1,000 ETFs Listed Across its Global Network
April 2, 2024--Latest milestone marks continued progress in Cboe's mission to build a global listings network and expand the investable universe for investors
Cboe welcomed 106 new ETF securities across its global network of listings exchanges in the first quarter of 2024
More than 120 issuer partners currently list ETF products on Cboe's global network of stock exchanges in the U.S., Canada, UK, European Union, and Australia
Cboe Global Markets, Inc. (Cboe: CBOE), the world's leading securities and derivatives exchange network, today announced that it has achieved a new milestone, surpassing more than 1,000 exchange traded funds (ETFs) listed across its global network of listings exchanges.
Source: Cboe Global Markets, Inc.
The Fiscal and Financial Risks of a High-Debt, Slow-Growth World
March 28, 2024-Higher long-term real interest rates, lower growth, and higher debt will put pressure on medium-term fiscal trends and financial stability
Inflation-adjusted interest rates are well above post global financial crisis lows, while medium-term growth remains weak. Persistently higher interest rates raise the cost of servicing debt, adding to fiscal pressures and posing risks to financial stability.
Decisive and credible fiscal action that gradually brings global debt levels to more sustainable levels can help mitigate these dynamics.
Public debt sustainability
Debt sustainability depends upon four key ingredients: primary balances, real growth, real interest rates, and debt levels. Higher primary balances—the excess of government revenues over expenditures excluding interest payments-and growth help to achieve debt sustainability, whereas higher interest rates and debt levels make it more challenging.
For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.
Source: imf.org
