Basel Committee reports to G20 Finance Ministers and Central Bank Governors on Basel III implementation
October 29, 2012--The Basel Committee on Banking Supervision has today published its Report to G20 Finance Ministers and Central Bank Governors on Basel III implementation by its member jurisdictions.
The report will be considered at the meeting of G20 ministers and governors in Mexico City on 4-5 November.
The report covers all three levels of the Committee's Basel III implementation review programme:
view the Report to G20 Finance Ministers and Central Bank Governors on Basel III implementation
Source: BIS
ETFS Precious Metals Weekly-
October 29, 2012--Precious metals range trade as the market anxiously awaits a bailout request from Spain. Pressure continues to mount on Spain, with unemployment rising to 25% in September, the highest level in Spain's democratic history.
Moody's, the rating agency downgraded five of Spain's regions, citing a deterioration in their liquidity positions. Spanish regional governments account for a third of spending, yet only raise a fifth of the nation's revenue. It is widely expected that Spain will have to ask for a bailout to continue to support its regions, but is delaying this decision to until Catalonian elections take place on 25th November 2012. Once Spain asks for this bailout, the ECB can start buying Spanish bonds, which may help boost sentiment in the Euro, weaken the US dollar and stimulate renewed demand for precious metals, especially gold. For the moment, the elevated net long futures position in gold continues to unwind as investors become impatient with the lack of decisive action from Spain.
Better-than-expected Q3 GDP in UK tempers UK QE outlook. Expectations of further rounds of quantitative easing were tempered as the Governor of the Bank of England commented just days before the release of the GDP data that "loose monetary policy today will eventually give way to a tighter stance of policy as the economy recovers".
Fed remains fully committed to easy monetary policy. Following its policy meeting last week, the Federal Reserve on the reiterated its commitment to undertake additional purchases of MBS if the labour market does not improve substantially. US data has generally been positive: initial jobless claims fell last week to 369k compared to 392k the previous week; new home sales were up by a strong 5.7% month on month; and Q3 GDP growth of 2% annualised was higher than expected. However, the Fed has made it clear that it needs the US recovery to be well underway and employment far higher than it is today before considering ratcheting back its easing policies.
Key events to watch this week: US payrolls data. Given the important role employment data plays in the Fed' policy decision making process, the non-farm payrolls data for October will be closely watched. Revisions to previous month's readings will also be scrutinised in this volatile series. US ISM manufacturing and factory orders along with final manufacturing PMI data will help confirm the strength of the industrial cycle. The market is expecting a 0.4% quarter-on-quarter contraction in Spanish Q3 GDP to be announced this week. A deeper contraction could push the case for more urgency in Spain requesting a bailout.
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Source: ETF Securities
ETFs take centre stage
October 29, 2012--As 2012 draws to a close, the European exchange-traded market is preparing itself for a record year of asset growth, shrugging off the concerns of a slow 2011.
Investors are increasingly applying new ways to use ETFs, are holding them for longer and are treating them more as a core part of their investment portfolios.
This year’s Financial News ETF Snapshot Survey, polling investors in August and September, found market participants more optimistic in their outlook.
Source: Financial News
ETF Securities hires Peter Lidblom as head of Nordics
October 29, 2012--ETF Securities has hired Peter Lidblom as a head of the Nordic region to manage the group's relationships with key financial institutions. He will have a particular focus on Denmark, Sweden, Norway and Finland, reporting to co-head of Emea sales, Isabell Mössler.
Lidblom joins from NSBO, a specialist global institutional broker, where he was responsible for China macro / sector thematic sales to Nordic institutional investors, banks and corporations. More recently he sold ETF best execution services in Europe following a joint venture between NSBO and Wallach Beth Capital in New York.
Source: Global Investor
IOSCO Reviews Implementation of Commodity Derivatives Market Principles
October 29, 2012--The International Organization of Securities Commissions has published today the final report Survey on Implementation of the Principles for the Regulation and Supervision of Commodity Derivatives Markets, which reviews how Market Authorities1 comply with IOSCO's recommendations on commodity derivatives markets.
Results of the survey indicate that the majority of respondents were broadly compliant with the IOSCO Principles on the Regulation and Supervision of Commodity Derivatives Markets, which were published in October 2011 and endorsed by the G20 a month later at its summit in Cannes. Also at Cannes, the G20 Leaders called on IOSCO to report on the implementation of its Principles by the end of 2012.2
Source: IOSCO
Chinese banks flee London's tough rules
October 28, 2012--China's largest state-owned banks are moving big chunks of their European business to Luxembourg as they seek to escape tougher regulation in the City of London.
In a recent letter to the UK Treasury, the Chinese banks bitterly complained that uneven regulation and “rigorously demanding” liquidity rules had prompted them to transfer business and even the management of their European operations out of London.
Source: FT.com
US money market funds return to eurozone
October 28, 2012--US money market funds have increased their exposure to eurozone banks, in the latest sign of returning confidence in the stability of Europe's monetary union.
Exposure to eurozone banks of US prime money market funds at the end of September was 16 per cent higher on a dollar basis than a month earlier, according to Fitch Ratings. The third consecutive monthly rise followed a pledge in late July by Mario Draghi, European Central Bank president, to do “whatever it takes” to preserve the euro’s integrity
Source: FT.com
Gold Traders More Bullish as ETP Hoard Sets Record: Commodities
October 26, 2012--Gold traders are the most bullish in three weeks as investors' bullion holdings rose to a record on mounting speculation that central banks will add stimulus to bolster economic growth.
Fourteen of 26 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors boosted holdings in exchange-traded products to an all-time high of 2,585.1 metric tons yesterday, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to U.S. Commodity Futures Trading Commission data.
Source: Bloomberg
IMF Working paper-The Domestic Credit Supply Response to International Bank Deleveraging: Is Asia Different?
October 26, 2012--Summary: During the global financial crisis, European banks contracted foreign claims on recipient economies sharply. This paper examines the impact of that deleveraging on credit supply in recipient economies, with a particular focus on Asia.
Identification is achieved by exploiting heterogeneity in ex-ante patterns of funding reliance on different European banking systems, and in variation in the ratio of local claims in local currency to total foreign claims in recipient economies. These sources of variation are used to create instruments for the deleveraging shock. We find that the contraction in European bank foreign claims was associated with a substantial reduction in domestic credit supply in a broad sample of countries. However, the credit supply response in Asia was only about half the size of the response in non-Asian countries, possibly due to a more robust policy response and healthier local bank balance sheets at the outset of the crisis.
Source: IMF
FTSE/ATHEX Global Traders Index Series New Indices Creation
October 25, 2012--ATHEX in cooperation with FTSE, designed a new index series to enable the monitoring of the market performance of the listed companies that have highly globalised activity either in exports or through production abroad.
These indices record and highlight in the globalized investment community the transnational character of the Greek companies which is constantly strengthened.
Source: Mondovisione