Global ETF News Older than One Year
Global systemically important banks: information regarding the end-2012 exercise published by the Basel Committee
November 11, 2013--In conjunction with the publication by the Financial Stability Board (FSB) of the updated list of global systemically important banks (G-SIBs), the Basel Committee on Banking Supervision has today published additional information regarding the G-SIB methodology.
In accordance with the timeline set out in its updated methodology for assessing and identifying G-SIBs, the Basel Committee has published: (1) the denominators that were used to calculate the scores of banks in the end-2012 exercise; and (2) the cut-off score and bucket thresholds that were used to identify the updated list of G-SIBs and to allocate them to buckets.
Source: BIS
ETFS Precious Metals Weekly-Gold Price Hit as Strong US Data Drives US Dollar Higher
November 11, 2013--Gold hit as investors accelerate tapering expectations and US dollar rallies on strong US growth data. US payrolls surprised to the upside and China growth data also came in above expectations, creating a strong base for continued gains for cyclical assets.
At the same time, the ECB cut its benchmark refinancing rate by 25ps to 0.25% sending the Euro sharply lower. The cut followed the release of October CPI showing that Eurozone inflation fell to 0.7% in October, the lowest level in nearly four years. Silver and platinum ended the week with only slight losses and palladium increased 2.7% as strength in the US (and global) economy benefitted the more industrial orientated precious metals. In the near-term, the strength of the US dollar may keep downward pressure on the gold price. However with the gold price now well below US$1,300/oz again, physical demand from China and other emerging markets should start to play a supporting role.
Source: ETF Securities
IMF Working paper-Fiscal Consolidations and Growth: Does Speed Matter?
November 11, 2013--Summary: Should fiscal consolidations be front-loaded or proceed at a more steady pace, and how does this affect growth? We make an attempt to address this question using a three-step methodology.
First, we modify a standard regression of growth on consolidation size to allow speed to affect the multiplier. Second, using the narrative dataset of Devries and others (2011), we construct a new sample of multi-year consolidation episodes for 17 advanced economies over 1978-2009. Third, we develop a novel concept of speed to measure the pace of the consolidation episodes identified in the data. The main empirical finding is that fast episodes have higher multipliers than gradual consolidations. This provides some preliminary support for consolidating at a steady pace, market access and a credible adjustment plan permitting. However, as the sample size is small, identifying mechanisms and testing robustness is difficult, and so our findings should not be interpreted causally.
view the IMF Working paper-Fiscal Consolidations and Growth: Does Speed Matter?
Source: IMF
Twitter shares found suitable for Islamic investment
November 11, 2013--Shares in Twitter Inc have been found eligible for investment by Islamic funds, according to IdealRatings, a company that screens stocks to determine whether they meet Muslim principles.
IdealRatings said it had vetted Twitter in response to requests from fund managers and individual investors around the world. The social media company's share price soared in last week's New York Stock Exchange debut after a $1.8 billion initial public offer.
Source: Todays Zaman
SPDR Market Commentary-Weekly Market Report
November 8, 2013--ECONOMIES: Strong GDP headline in the US but the quality of growth is poor. Employment rises solidly in the US but weakly in Canada and Australia. The European Central Bank cuts administered rates. The Bank of England and the Reserve Bank of Australia leave their policy rates unchanged.
MARKETS: Muddled data keep equities mixed. Government bonds are weaker on Fed tapering speculation. ECB rate cut sends EUR lower. Oil and gold are down.
NEXT WEEK PREVIEWED
SPOTLIGHT: Industrial production should be weak in the US. GDP likely rose modestly in Germany, France, and the overall eurozone.
GDP should stabilize in Italy. GDP growth likely slowed in Japan from the robust first half pace. Inflation likely slowed in France and the UK. Unemployment should fall in the UK.
THE WEEK IN REVIEW
US
This week's data painted a muddled picture of the economy
over the last few months. On balance, key headlines were
stronger than expected and indeed arguably suggest an
economy with encouraging resilience. This in turn suggests
an improving case for earlier Fed tapering, perhaps even in
December. However, the details of key reports were mixed and
there is also frankly heightened concern about the reliability of
the data because of the government shutdown. This backdrop is
a formula for widely divergent views on near term economic and
policy prospects, likely fomenting jarring market volatility.
The third quarter GDP GROWTH headline was much better than
expected but the quality of growth was generally poor. GDP
rose a solid 2.8% (annual rate) according to the preliminary
estimate, a surprising pickup from the 2.5% growth posted
in Q2 to the strongest print in four quarters. However, this
headline was bloated by an unexpectedly large inventory
build in the quarter, which bodes ill for growth in coming
quarters if production slows to work off any undesirable
inventory overhang. Indeed, final sales of domestic product,
which abstracts from inventories, rose at a lackluster 2.0%
in Q3, down slightly from the previous quarter. Moreover,
final domestic demand weakened even more, slowing from
2.1% in Q2 to an anemic 1.7% in Q3. Although residential
fixed investment remained surprisingly robust, rising 14.6%,
consumer spending slowed to just 1.5% (its weakest in just
over two years) and nonresidential fixed investment slowed
to just 1.6%. Government purchases improved but only to
a minimal 0.2% gain as Federal spending continued to fall.
Finally, international trade boosted overall growth by 0.3 point as exports rose 6.4% and imports 1.9%, but this is a tentative figure based on incomplete data. Year-over-year, overall GDP rose 1.6% in Q3, a pace unchanged from the previous quarter and highlighting the still lackluster pace of recovery.
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Source: SSgA
DECPG Weekly Global Economic Brief
November 8, 2013--November 8, 2013--Demand stimulus to support growth in developing countries since 2007 has substantially eroded policy buffers. Agricultural and metals commodity producers have suffered a large negative terms of trade shock due to sharp declines in food and metal prices since 2011.
Together these developments have contributed to rising domestic and external imbalances in developing countries, reducing their capacity to respond to external shocks. Developing country gross capital flows remain volatile, with a sharp drop in October fully reversing September's rebound.
Demand stimulus in developing countries in the post-crisis period has eroded policy buffers. Automatic stabilizers and policy makers' efforts to revive growth after the 2007 financial crisis have depleted policy space in developing countries, while adding to domestic and external imbalances. Compared to 2007, fiscal balances have deteriorated by over 4 percentage points of GDP in nearly half of developing countries. Among middle-income countries, fiscal deficits rose to about 4 percent of GDP in 2012 in Malaysia, South Africa and Thailand, and nearly 8 percent in India. Partly reflecting strong capital inflows,monetary policy also remains loose, with most developing country central banks having cut policy rates over the past two years. With output remaining capacity constrained current account deficits are rising, and looser policy has translated into rising or persistently high inflation despite falling food prices over the past two years.
Source: World Bank
EPFR Global News Release-Flows reflect investor caution as unanswered policy questions abound
November 8, 2013--A horizon full of possible shifts in economic policy kept the lid on fund flows during the first week of November, with only Money Market Funds -a proxy for cash -and funds dedicated to European and Japanese assets seeing significant inflows.
Overall, EPFR Global-tracked Bond Funds took in a net $1.7 billion during the week ending Nov. 6 and Money Market Funds $22.2 billion while $1.7 billion flowed out of Equity Funds.
With the third quarter earnings season beginning to wind down, investors shaping their strategies for next year are looking ahead to the Chinese Communist Party Central Committee's 3rd plenary session starting this weekend, the US Federal Reserve's meeting and the European Union leaders' summit in December and the expiration of the temporary US debt and budget extensions in early 1Q14.
Visit www.epfr.com for more info
Source: EPFR
Global ETF and ETP assets reached 2.3 trillion US dollars, a new record high, at the end of October 2013
November 8, 2013--October marked another month of strong inflows with global ETFs/ETPs. Combining the US$32.6 billion of net inflows with positive market performance during October global ETF/ETP assets reached a new record high of US$2.3 trillion, according to preliminary findings from ETFGI's October 2013 Global ETF and ETP industry insights report.
"The expectation that the Federal Reserve will maintain it's QE scheme at its current size into 2014 and positive market performance encouraged investors to put net inflows of US$32.6 billion back into the market through ETFs/ETPs" according to Deborah Fuhr, Managing Partner at ETFGI.
In October 2013, equity ETFs/ETPs gathered the largest net inflows with US$34.6 billion, while commodity ETFs/ETPs experienced the largest net outflows with US$2.8 billion followed by fixed income ETFs/ETPs that saw net outflows of US$227 million.
Source: ETFGI
Gas boom to reshape US role in Asia
November 8, 2013--A boom in gas production will reshape the US role in Asia and could fuel new tensions with a growing, energy-hungry China, a new report says.
US foreign policy has historically been based largely on demand for outside energy, with Washington closely allying itself with oil-rich Arab monarchies.
Source: FIN24
OTC derivatives statistics as at end-June 2013
November 7, 2013--The latest BIS statistics on over-the-counter (OTC) derivatives markets show that notional amounts outstanding totalled $693 trillion at end-June 2013.
Of this total, $668 trillion was reported by dealers in the 13 countries that participate in the BIS's semiannual survey of derivatives markets, and $25 trillion by dealers in the 34 countries that participate only in the Triennial Central Bank Survey.
view the BIS Statistical release OTC derivatives statistics at end-June 2013
Source: BIS
