Global ETF News Older than One Year
IMF Working paper-The Changing Collateral Space
January 28, 2013--Summary: This paper highlights the changing collateral landscape and how it may shape the global demand/supply for collateral. We first identify the key collateral pools (relative to the "old" collateral space) and associated collateral velocities.
Post-Lehman and continuing into the European crisis, some aspects of unconventional monetary policies pursued by central banks are significantly altering the collateral space. Moreover, regulatory demands stemming from Basel III, Dodd Frank, EMIR etc., new net debt issuance, and collateral connectivity via custodians (e.g., Euroclear/ Clearstream/ BoNY etc) will affect collateral movements.
view the IMF Working paper-The Changing Collateral Space
Source: IMF
Boost Weekly Performance Update-Boost 3x Short Natural Gas Up 8.5% Last Week
Leveraged Equity ETPs & Short ETCs Gain as Equities Rise & Commodities Fall
January 28, 2013--
Equities rebound last week after being relatively flat the previous week
UK equities posted the largest weekly move, with Boost FTSE 100 3x Leveraged Daily ETP (3UKL) up 6.4% for the week. German equities followed closely with Boost LevDAX(R) 3x Daily ETP (3DEL) up 6%
UK equities also performed best over the previous two months, up 8.2%. Boost FTSE 100 3x Leveraged Daily ETP (3UKL) was up 25.3% over that period
US equities were more mixed last week as Boost Russell 1000 3x Leveraged Daily ETP (3USL) was up 3.8% while the NASDAQ 100 ended the week relatively flat
Commodities lose ground last week, reversing gains from the previous week
Boost Natural Gas 3x Short Daily ETP (3NGS) posted the highest return last week, up 8.5%, followed by Boost Silver 3x Short Daily ETP (3SIS), up 6.5%
Over the past two months, commodity performance was more mixed. On the long side, Boost WTI Oil 3x Leveraged Daily ETP (3OIL) was up 22% while on the short side Boost Natural Gas 3x Short Daily ETP (3NGS) was up 43%
Commodities have been more volatile than equities over the past two months. Natural Gas was the most volatile, with Boost Natural Gas 3x Short Daily ETP (3NGS) up 99% between 23 November and 9 January, with Boost Natural Gas 3x Leverage Daily ETP (3NGL) rebounding 33% since then
Source: Boost ETP
China's Currency Unlikely to Topple US Dollar as World's Reserve Currency
China's currency, the RMB, is unlikely to internationalize in the short term
The world needs to better understand how Beijing views its global responsibilities
January 26, 2013--China's currency, the renminbi (RMB), will probably not supplant the US dollar as the world,s reserve currency, except possibly "in the very long term", said Lawrence H. Summers, Charles W. Eliot University Professor, Harvard University, and a former US Treasury Secretary, in a televised session at the World Economic Forum Annual Meeting today.
While the RMB will continue to internationalize, “the centrality of the dollar is unlikely to change in a major way,” Summers said, adding, “just as there is a basic inertia in languages of communication, there’s a basic inertia in mediums of exchange.”
Source: WEF (World Economic Forum)
The Global Economy in 2013: "Fragile and Timid Recovery"
The International Monetary Fund forecasts 3.5% GDP growth for the global economy in 2013
The economic climate is much better this year than last year, but the recovery is "fragile and timid"
A new economic policy in Japan and strength in China and Africa provide glimmers of hope
January 26, 2013--The global economy faces fewer headwinds in 2013 compared with last year and will likely grow a modest 3.5%, participants at the 43rd World Economic Annual Meeting were told in Davos, Switzerland.
But Christine Lagarde, Managing Director, International Monetary Fund (IMF), described the recovery as “fragile and timid” because the Eurozone is prone to political crisis and slow decision-making processes.
“Some good policy decisions have been made in the various corners of the world, including by central banks,” said Lagarde. “In 2013, they have to keep the momentum.” She called on Europe to operationalize the new tools policy-makers have recently devised, including Europe’s banking union. Lagarde also credited the United States with making significant progress on fiscal consolidation, an achievement that she said tended to be overlooked.
Mark J. Carney, Governor of the Bank of Canada, echoed Lagarde’s caution. “There are still tail risks out there,” he warned, refuting some claims made in Davos that these risks have been reduced or totally eliminated. While central bank action is crucial, said Carney, this needs to be reinforced at the national level on the fiscal and structural sides, “and neither of those agendas are anywhere being finished.”
Source: WEF (World Economic Forum)
Liquidity Bubble a Risk as Economy Improves
Central banks will need to remove liquidity from the system as economic conditions improve
2013 will be a transition year in which spending will increase
Productivity will replace liquidity as the primary focus for growth
January 25, 2013--Speaking today at the 43rd World Economic Forum Annual Meeting, Ray Dalio, Founder and Chief Investment Officer of Bridgewater Associates, warned against a growing liquidity bubble. "When spending picks up, it will be incumbent on the central banks to mop excessive liquidity up," he said, warning against inflation risk.
Dalio described the new norm as being a depressed economy, saying the discussion will shift from liquidity to productivity. “Productivity will be the driver,” he said. “The debt cycle will no longer be the driver; 2013 will be a transition year and the shift of cash will be a game changer.”
Dalio was speaking on a panel which included Anshu Jain, Co-Chairman of the Management Board and the Group Executive Committee, Deutsche Bank; Jin Liqun, Chairman of the Board of Supervisors, China Investment Corporation (CIC); Pierre Moscovici, Minister of Economy and Finance of France; Brian T. Moynihan, Chief Executive Officer, Bank of America; and Ignazio Visco, Governor of the Bank of Italy.
Source: WEF (World Economic Forum)
EPFR Global Fund Data News Release-EM Funds extend lead as rush to equities slowed by rocky macroeconomic terrain
January 25, 2013--Heading into the final week of January EPFR Global-tracked Equity Funds outgained Bond Funds for the seventh week running and Emerging Markets Equity Funds trumped Developed Markets Equity Funds for the seventh time in eight weeks.
But the pace of inflows ebbed again as recent European data and IMF forecasts prompted investors to take a more sober look at their assumptions for 2013. Equity Funds did attract retail money for the third consecutive week, something they last achieved in February 2011.
Overall, Equity Funds absorbed a collective $5.65 billion -- of which over 70% flowed into Emerging Markets Equity Funds – during the week ending Jan. 23 while Bond Funds took in a net $3.71 billion and Money Market Funds saw $6.78 billion redeemed. Year-to-date Equity and Bond Funds have posted inflows of $39 billion and $18.7 billion respectively versus $15.82 billion and $17.84 billion for the comparable period last year.
Visit http://www.epfr.com for more info
Source: EPFR
MSCI reshuffles index business management team
January 24, 2013--MSCI has announced a number of changes to its index business management team, with the appointment of Deborah Yang to lead the MSCI index business across Europe, the Middle East, Africa and India.
Yang joined MSCI in 2001, most recently serving as managing director and head of client coverage for MSCI Asia ex Japan, based in Hong Kong. Prior to working at MSCI, she was with Donaldson, Lufkin & Jenrette based in New York and San Francisco.
Source: Investment Europe
Global FDI recovery derails
Global foreign direct investment declined by 18 per cent in 2012-a level close to the trough reached in 2009-due mainly to macroeconomic fragility and policy uncertainty for investors.
January 24, 2013--Global foreign direct investment (FDI) inflows declined by 18 per cent in 2012, down from $1.6 trillion in 2011 to an estimated $1.3 trillion.
The strong decline of FDI flows is in stark contrast to other macroeconomic variables, including gross domestic product (GDP), trade and employment growth, which all remain in positive territory.
The FDI recovery that had started in 2010 and 2011 will now take longer than expected. FDI flows could rise moderately to $1.4 trillion in 2013 and $1.6 trillion in 2014, due to slight improvements in macroeconomic conditions and the reprofiling (e.g. releasing record cash reserves for investment) of transnational corporations (TNCs). However, significant risks to this scenario persist, including structural weaknesses in major developed economies and in the global financial system, and significant policy uncertainty in areas crucial for investor confidence. Should these risks prevail, the FDI recovery could be further delayed.
view the Global Investment Trend Monitor, No. 11
Source: UNCTAD.org
Bankers Call for Better-Not More -Regulation
Leaders of financial institutions disagree over whether the sector is still too complex and opaque
Financial institutions must take risks to fuel economic growth, but these risks must be managed
Regulation is needed, but global regulation may be a challenge in today's rapidly changing, multipolar world
January 23, 2013--Leaders of the world's largest financial institutions participating in the World Economic Forum Annual Meeting today agreed that the sector is still too complex and opaque, with the exception of James Dimon, Chairman and Chief Executive Officer, JPMorgan Chase & Co., USA.
Participants agreed on the need for regulation, but disagreed on how much is too much and whether or not global regulation is possible in today’s rapidly changing, multipolar world.
Source: World Economic Forum
World Economic Outlook Update-Gradual Upturn in Global Growth During 2013
January 23, 2013--Global growth is projected to increase during 2013, as the factors underlying soft global activity are expected to subside. However, this upturn is projected to be more gradual than in the October 2012 World Economic Outlook (WEO) projections. Policy actions have lowered acute crisis risks in the euro area and the United
States.
But in the euro area, the return to recovery after a protracted contraction is delayed. While Japan has slid into recession, stimulus is expected to boost growth in the near term. At the same time, policies have supported a modest growth pickup in some emerging market economies, although others continue to struggle with weak external demand and domestic bottlenecks. If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected. However, downside risks remain significant, including renewed setbacks in the euro area and risks of excessive near-term fiscal consolidation in the United States. Policy action must urgently address these risks.
Source: IMF
