DCGX Academy: Jul: OPTIMISTIC: Euro relax aid norms, pledge 153$B, ECB Rate Cut, joblessness forecast at 11.1%
July 2, 2012--COMMODITIES
Hedge Funds Win on Bull Bets Before Biggest Rally
Speculator Bullish Oil Wagers Rose Before Rally: Energy Markets
Oil Falls as Biggest Gain Since 2009 Prompts Selling on Europe
Copper Falls as Investors Weigh Europe Plan, Inventories Climb
Gold, Silver Decline as USD Strengthens Before European Data
Iran-Oil Sanctions Risk Biggest OPEC Export Loss Since Libya
Algeria Says OPEC May Meet on Price Decline
FOREIGN EXCHANGE
India's current account deficit rises to 4.2% of GDP Vs. 2.7% previous year
INR rises 2.1% in June
Euro Advances After EU Summit as USD declines in Risk Advance
Canadian USD Advances in June on Europe Debt-Concerns Optimism
Source: DGCX Academy
Dealing with domestic systemically important banks, consultative document issued by the Basel Committee
June 29, 2012--June 29, 2012--The Basel Committee on Banking Supervision today issued a consultative document on A framework for dealing with domestic systemically important banks.
In November 2011, the Basel Committee issued final rules for global systemically important banks (G-SIBs). These rules, Global systemically important banks: assessment methodology and the additional loss absorbency requirement, were endorsed by the G20 Leaders at their November 2011 meeting. At that meeting, the G20 Leaders asked the Basel Committee and the Financial Stability Board to work on "the modalities to extend expeditiously the G-SIFI framework to domestic systemically important banks (D-SIBs)."
A framework for dealing with domestic systemically important banks-Consultative document
Source: BIS
Options: Comparison of Risks in Synthetic Stock
June 28, 2012--The use of offsetting option positions creates "synthetic stock" - the no-cost or low-cost option combination behaves just like stock. The risks in the position, by the way, are the same as those risks in 100 shares, but for much less cash outlay.
A synthetic long stock position costs of a long call and a short put, opened as close to the money as possible. It is best suited for underlyings you believe will rise in value. As this occurs, the call gains one point of intrinsic value for each point the stock gains, and the short put will expire worthless.
A synthetic short stock position is the opposite: a long put and a short call, opened close to the money. It works best when you expect the underlying price to decline. For each point the stock loses, the put gains one point and the short call will expire worthless.
Source: FT Press
Derivatives bets could cost JPMorgan $9 billion, sources say
June 28, 2012--JPMorgan Chase faces as much as $9 billion in losses related to its bets on credit derivatives,sources said.
JPMorgan CEO Jamie Dimon announced in May a $2 billion loss on the trades, and said it could double. However, the losses have mounted more quickly than expected as the banking giant unwinds its positions, according to sources.
Source: FIA SmartBrief
IMF Working paper-Factor Endowment, Structural Coherence, and Economic Growth
June 28, 2012--Summary: This paper studies the linkage between structural coherence and economic growth. Structural coherence is defined as the degree that a country's industrial structure optimally reflects its factor endowment fundamentals.
The paper found that at least for the overall capital, the shares of capital intensive industries were significantly bigger with higher initial capital endowment and faster capital accumulation. Moreover, there is a positive relationship between a country's aggregate output growth and the degree of structural coherence. Quantitatively, the structural coherence with respect to the overall capital explains about 30% of the growth differential among sample countries.
view IMF Working paper-Factor Endowment, Structural Coherence, and Economic Growth
Source: IMF
DCGX Academy: US DATA: Durable and Housing Rises eases concerns, EU 19th Meeting
HIGHLIGHTS
COMMODITIES
Oil Climbs a Third Day on U.S. Economic Outlook, Norway Strike
Copper Gains for Fourth Day as Base Metals Rise After U.S. Data
Mint Gold-Coin Sales in June Exceed Last Month's Total
Stocks Gain With Commodities on U.S. Data, China Stimulus Bets
FOREIGN EXCHANGE
Barclays Plc was fined 290 million pounds ($451 million) for false inter bank rates
USD Declines Against Peers Before EU Summit; Aussie Advances
Rupee Rises - Fall in current account deficit will prop the currency
Yuan Declines as PBOC Lowers Reference Rate
Slowdown Concern Ebbs on Durable, U.S. Home Sales: Economy
Pound Declines as Mortgage Approvals Back Case for More Stimulus
Asian Currencies Gain on U.S. Data, China Stimulus Speculation
Source: DGCX Academy
SeaDrill Limited Added to Dow Jones Global Select Dividend Index
June 26, 2012--Norway's SeaDrill Ltd. will be added to the Dow Jones Global Select Dividend Index, Dow Jones Indexes announced today.
The addition of SeaDrill Ltd. follows the removal of Progress Energy Inc. (United States), which is being removed due to its acquisition by Duke Energy Corp. (United States).
SeaDrill Ltd. is an offshore deepwater drilling company.
The changes in the Dow Jones Global Select Dividend Index will be effective before the open of trading on Monday, July 2, 2012.
The Dow Jones Global Select Dividend Index measures the stock performance of 100 leading dividend-paying companies worldwide.
Company additions to, and deletions from, the Dow Jones Global Select Dividend Index does not in any way reflect an opinion on the investment merits of the company.
Source: Dow Jones Indexes
Final rules on banks' disclosure of the composition of their capital issued by the Basel Committee
June 26, 2012--The Basel Committee on Banking Supervision today issued its final rules on the information banks must disclose when detailing the composition of their capital.
Entitled Composition of capital disclosure requirements - Rules text, the publication sets out a framework to ensure that the components of banks' capital bases are disclosed in standardised formats across jurisdictions.
During the financial crisis, market participants and supervisors were hampered in their efforts to undertake detailed assessments of banks' capital positions and make comparisons across jurisdictions. Adding to these difficulties were insufficiently detailed disclosure by banks and a lack of consistency in reporting across banks and jurisdictions. This lack of clarity may have contributed to uncertainty during the financial crisis and could have masked how far banks were relying on forms of capital that were insufficiently loss-absorbent. The disclosure requirements published today should help to improve market discipline by enhancing both transparency and comparability.
view the Composition of capital disclosure requirements-Rules text
Source: BIS
Basel Committee issues Principles for effective risk data aggregation and risk reporting -consultative document
June 26, 2012--The Basel Committee on Banking Supervision today issued for consultation Principles for effective risk data aggregation and risk reporting-consultative document.
The financial crisis that started in 2007 revealed that many banks, including global systemically important banks (G-SIBs), were unable to aggregate risk exposures fully and quickly. This meant that banks' ability to take risk decisions in a timely fashion was seriously impaired with wide-ranging consequences for individual banks and the stability of the financial system as a whole.
The proposed principles published today are intended to strengthen banks' risk data aggregation capabilities and risk reporting practices. Implementation of the principles will strengthen risk management at banks - in particular, G-SIBs - thereby enhancing their ability to cope with stress. "These proposals are a significant step towards improving banks' risk management capabilities and they will also help to ensure that G-SIBs are resolvable, hence reducing the potential recourse to tax-payers," said Stefan Ingves, Chairman of the Basel Committee on Banking Supervision and Governor of the Sveriges Riksbank, Sweden's central bank.
view the Principles for effective risk data aggregation and risk reporting - consultative document
Source: BIS
State Street Global Advisors Issues Mid Year ETF & Investment Outlook
June 26, 2012--State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (NYSE: STT), today released a new report titled, 2012 ETF & Investment Outlook: Sinking or Swimming?, which focuses on developments shaping market performance and the Exchange Traded Fund (ETF) industry during the first half of 2012 and provides an updated investment outlook for the remainder of the year.
Developed by the SPDR ETF Strategy & Consulting Group, the report reveals that US ETFs attracted more than $60 billion of inflows over the first five months of 2012, as 100 new funds were launched by 17 different providers, including one new entrant to the market. Amid signs the low interest rate environment will continue for the foreseeable future, demand for dividend/fundamental ETFs – the most popular category in 2011 – remained on top, as investors added $8.9 billion of inflows to these funds in the first five months of the year. Investors also increased their exposure to credit/corporate, government credit and high yield bond ETFs.
“With concerns over job growth in the US top of mind coupled with Europe’s debt problems, investors continue to put their savings to work in ETFs that provide alternative sources of yield,” said Kevin Quigg, global head of ETF Strategy & Consulting at State Street Global Advisors. “If flows continue at this pace, 2012 will mark the sixth consecutive year that ETFs attract more than $100 billion in positive cash flows, which is remarkable given the trajectory of the markets during this period of time.”
To download a copy of 2012 ETF & Investment Outlook: Sinking or Swimming?, please visit SPDR University (www.spdru.com), State Street’s award-winning online educational resource for investment professionals or ETF Fact or Fiction (www.etffactorfiction.com), a new website launched by State Street to provide individual investors with a comprehensive, trusted resource for ETF education.
Source: State Street Global Advisors (SSgA)