Global ETF News Older than One Year
How War in Ukraine Is Reverberating Across World's Regions
March 15, 2022--The conflict is a major blow to the global economy that will hurt growth and raise prices.
Beyond the suffering and humanitarian crisis from Russia's invasion of Ukraine, the entire global economy will feel the effects of slower growth and faster inflation.
Impacts will flow through three main channels.
One, higher prices for commodities like food and energy will push up inflation further, in turn eroding the value of incomes and weighing on demand. Two, neighboring economies in particular will grapple with disrupted trade, supply chains, and remittances as well as an historic surge in refugee flows. And three, reduced business confidence and higher investor uncertainty will weigh on asset prices, tightening financial conditions and potentially spurring capital outflows from emerging markets.
Source: imf.org
Housing market risks in the wake of the pandemic
March 10, 2022--Key takeaways
House prices rose strongly in advanced economies during the pandemic, breaking with typical post-recession patterns. These developments support domestic demand in the short term but carry risks to the outlook if they reverse.
Rapid economic recovery, fiscal support and high saving rates amid negative real interest rates explain part of the strong housing demand. Pandemic-induced demand for space, structural supply constraints and increased demand from investors provide additional support for house prices.
The monetary policy response to inflationary pressures will be a relevant factor when assessing housing market risks. Moderate increases in interest rates could help forestall speculative demand.
view more Source: BIS
Source: BIS
How does the war in Ukraine affect oil prices?
March 4, 2022--On 24 February 2022 Russia launched a military invasion on Ukraine.
Already inflated oil prices have since skyrocketed to over $110 per barrel.
An expert discusses the impact on energy prices and the energy transition.
Two weeks ago when oil prices were approaching $100, Maciej Kolaczkowski, Manager Oil and Gas Industry from the World Economic Forum's Energy, Materials, Infrastructure Platform, explained the impacts on inflation and the key factors determining oil prices, how prices affect the global economy and the implications for the energy transition. He said that "no one had a crystal ball" and indeed one week later Russia started a war in Ukraine.
Source: weforum.org
Why Ethereum is switching to proof of stake and how it will work
March 4, 2022--One of the world's biggest blockchains is testing a new way to approve transactions. The move has been many years in the making but doesn't come without risks.
The market for NFTs-tokens that represent digital art, music, videos, and the like-soared last year to $44 billion.
This brought a lot of attention to Ethereum, the blockchain network where most NFTs are bought and sold. It also brought a lot of attention to something else: the massive energy wastefulness of cryptocurrency mining.
Blockchains don't have a central gatekeeper, like a bank, to verify transactions. Instead, both Bitcoin and Ethereum, the two largest cryptocurrencies, rely on a consensus mechanism called "proof of work" to maintain a time-ordered ledger of transactions. Crypto miners are at the core of that process.
Source: technologyreview.com
Russia's 'Uninvestable' Stocks Cut by MSCI, FTSE Russell
March 2, 2022--Decision likely to cause exodus in active and passive funds
LSE suspends trading in dozens of Russia depositary receipts
MSCI Inc. and FTSE Russell are cutting Russian equities from widely-tracked indexes, while the London Stock Exchange suspends dozens of Russian depositary receipts from trading, isolating the stocks from a large segment of the investment-fund industry.
Source: bloomberg.com
Even without sanctions, flows of oil, coal and gas will be disrupted by Ukraine crisis
March 2, 2022--Very few companies appear prepared to take the risk of doing business with Russia, meaning trade could dry up even without international sanctions.
Europe is heavily dependent on Russia for energy commodities, including for 40% of its natural gas.
It could instead buy liquefied natural gas (LNG) from other countries, but this will be expensive, with prices up by nearly 30% in a week.
China may continue to buy Russian crude oil, but it is unlikely to take anywhere near enough to cover Russia's lost shipments to Europe.
Russia's invasion of Ukraine will disrupt the global movement of energy commodities, even if Western powers don't impose sanctions on exports from Russia.
So far none of the retaliatory measures against Moscow have been targeted at exports of crude oil, coal or natural gas, the latter either by pipeline or by ships as liquefied natural gas (LNG).
That's perhaps tacit acknowledgment of Russia's importance to the global supply of these commodities, especially with regard to natural gas, with Russia meeting about 40% of Europe's annual demand.
Source: weforum.org
Sustainable Finance in Emerging Markets is Enjoying Rapid Growth, But May Bring Risks
March 1, 2022-- Financial stability concerns include potentially higher sensitivity to global financial conditions.
Most of the activity in the rapidly growing world of sustainable finance has been previously concentrated in advanced economies, but emerging markets, while still a small share of the total, saw a surge last year.
As a result, their market share has increased for the first time since 2016, underscoring the growing investor appetite for environmental, social, and governance (ESG) products, but this growing opportunity also poses new risks.
ESG's rising prominence
Sustainable finance incorporates ESG principles into business decisions and investment strategies, covering issues from climate change to labor practices. It has become more mainstream in emerging markets in part because of pandemic-related financing needs, such as healthcare, as well as Latin America's surge in climate-related borrowing.
Source: IMF
Key takeaways from the IPCC report on climate impacts and adaptation
March 1, 2022--A new major report has been released by the U.N. climate panel.
The report details the already stark effects of climate change and the worsening conditions for the majority of life on Earth.
Inferences include the destruction of habitats, the significant decline of biodiversity and the risk to global food supplies.
The report also underlines the need to conserve 30% to 50% of the Earth's land, freshwater and ocean areas-echoing the 30% goal of the U.N's Convention on Biodiversity.
The U.N. climate panel's latest major report, details how climate change is impacting nature, societies and economies, as well as what we can do to adapt in a warming world. read more
Here are some of the report's main conclusions:
'Widespread' damage is already occurring
People and other animals are already dying in heatwaves, storms and other disasters fuelled by global warming, the Intergovernmental Panel on Climate Change (IPCC) warns. Hundreds of plant and animal species have disappeared from local areas, both on land and at sea.
Source: weforum.org
Climate change: a threat to human wellbeing and health of the planet
February 28, 2022--Taking action now can secure our future
Human-induced climate change is causing dangerous and widespread disruption in nature and affecting the lives of billions of people around the world, despite efforts to reduce the risks. People and ecosystems least able to cope are being hardest hit, said scientists in the latest Intergovernmental Panel on Climate Change (IPCC) report, released today.
"This report is a dire warning about the consequences of inaction. " said Hoesung Lee, Chair of the IPCC. "It shows that climate change is a grave and mounting threat to our wellbeing and a healthy planet. Our actions today will shape how people adapt and nature responds to increasing climate risks."
The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5 ℃ (2.7℉). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible. Risks for society will increase, including to infrastructure and low-lying coastal settlements.
view the IPCC Climate Change 2022: Impacts, Adaptation and Vulnerability full report
Source: ipcc.ch
IMF Working Paper-The Effect of Tariffs in Global Value Chains
February 25, 2022--Summary:
This paper empirically investigates the impact of tariffs when production is organized in global value chains. Using global input-output matrices, we construct four different tariff measures that capture the direct and indirect exposure to tariffs at different stages of the production chain for a broad set of countries and industries. Our results suggest that tariffs have significant effects on economic outcomes, including on countries and sectors not directly targeted.
We find that tariffs higher up and further down in the value chain depress value added, employment, labor productivity and total factor productivity to varying degrees. We find no benefits for the sector that enjoys additional protection, yet there is some evidence of economic activity being diverted, i.e. positive effects on value added and employment from tariffs imposed on competitors. Our paper relates to recent innovations in theoretical gravity models and provides an empirical assessment of possible long-term effects of recent trade tensions.
Source: IMF
