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Europe's investors to feel pain of rising regulation costs
Firms wrestle with barrage of rules on how they manage money
Complying with changes is proving expensive
European sector may shrink to handful of huge players
EU is assessing impact but few expect slowdown or rethink
April 2, 2012--A raft of un-coordinated reforms demanded by the United States, the European Union and Britain threatens to
shrink Europe's investment industry to a handful of huge players, denting a campaign for lower fund fees and squeezing investor choice.
After surviving huge outflows triggered by the financial crisis, fund managers are wrestling with a barrage of new rules dictating how they attract, manage and earn money
STOXX MONTHLY INDEX REPORT-MARCH 2012 IN REVIEW
April 2, 2012--As of March 30, 2012 stock market indices in Europe, Asia, the U.S. and globally were up and down in March, according to global index provider STOXX Limited.
For the month of March, the Europe, Asia, U.S. and global markets were down -1.35% and -1.32%; and up 2.52% and 0.64%, respectively.
ETFS Precious Metals Weekly: Futures Investors Turn Bullish Gold as Bernanke Hints at Further Easing, Palladium ETP Holdings Hit 6-Mth High
April 2, 2012--Gold price halts slide as Bernanke comments indicate potential QE3, and futures net speculative longs surge 15% from lows. While Bernanke's comments last week highlighting the
possibility that the US employment improvement may be temporary
boosted investor confidence that the Fed will keep interest rates
lower for longer and that some form of quantitative easing may still
be on the cards, it was not enough to sustainably boost the gold price or turn net ETP selling into buying. Continued improvements in US economic data and the resulting rise in interest rate expectations and the US dollar remain headwinds to near-term gold price
outperformance. However, the medium-term outlook remains constructive for gold with historically low interest rates, abundant global liquidity, inflation risks from persistently elevated oil prices and now questions about the sustainability of recent US employment improvements likely to be supportive of longer term gold price gains.
While ETP investors remained net sellers last week, futures investors appeared to take Bernanke’s comments to heart, with speculative net long positions on COMEX bouncing 15% off their 3-month low last week.
India’s jeweller strike enters third week, weighing on gold physical demand. Indian jewellers have continued their strike, protesting the doubling of government excise duties on imported gold from 2% to 4%. While the government has remained largely silent on the matter, trade groups appear unwilling to budge either, with the Bombay Bullion Market Association (BBMA) indicating that if ‘the excise duty is corrected, trade will be happy’. While the strike could be quite protracted, the BBMA noted it would not be ‘indefinite’ and would not hinder the gold accumulation ahead of the Indian wedding season in the fourth quarter.
Global palladium ETP holdings rise to 6-month high. ETP investors continue to increase their exposures to palladium, with global palladium ETP holdings reaching their highest level since early October 2011. The combination of continued broad US economic recovery, improving US auto sales (March sales estimated to remain in double-digits), continued strong China auto demand growth and signs Japan’s auto sector is recovering from last year’s tsunami, have kept investor interest in palladium ETPs strong. Platinum ETPs have also seen increased investor interest recently, but palladium’s greater exposure to the gasoline dominated markets of the US and China appears to be causing investors to build larger exposures to palladium.
visit www.etfsecurities.com for more info
Markit acquires Data Explorers
April 2, 2012--Markit has today acquired Data Explorers, a leading provider of global securities lending data tracking short selling and institutional fund activity across all global market sectors.
Established in 2002, Data Explorers’ data and analytics help clients identify investment opportunities, measure performance and manage risk. With content sourced directly from market participants including prime brokers, custodians, asset managers and hedge funds, Data Explorers has built a unique data set of more than 3 million intraday transactions, covering $12 trillion of securities in the lending programmes of over 20,000 institutional funds.
Average daily volume of 10.1 million contracts at Eurex Group in March
April 2, 2012--In March 2012, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.1 million contracts (March 2011: 11.8 million).
Of those, 7.4 million were Eurex Exchange contracts (March 2011: 8.7 million), and 2.7 million contracts (March 2011: 3.1 million) were traded at the U.S.-based International Securities Exchange (ISE). In total, 163.1 million contracts were traded at Eurex Exchange and 58.9 million at the ISE.
In its largest segment – equity index derivatives – Eurex Exchange achieved 79.7 million contracts (March 2011: 97.2 million), of these 42.8 million were index futures and 36.9 million were index options. Futures on the EURO STOXX 50 Index stood at 34.7 million contracts and 27.7 million on the index options. Futures on the DAX index totaled 3.8 million contracts while the DAX options reached another 4.9 million contracts. The Eurex KOPSI Product recorded approximately 2.7 million contracts, an ADV of more than 121,000 contracts.
OCC Announces Cleared Contract Volume Declined 10% in March while Securities Lending Volume Rose 18%
April 2, 2012--OCC announced that cleared contract volume reached 379,763,970 contracts in March, representing a 10 percent decrease from the March 2011 volume of 421,466,054 contracts.
OCC ended the first quarter with total volume reaching 1,068,689,268 contracts, exceeding 1 billion contracts in the first quarter for the second time in history.
Options: Exchange-listed options trading volume reached 376,246,042 contracts in March, a 10 percent decrease from March 2011. Average daily options trading volume in March was 17,102,093 contracts, 6 percent lower than the 18,138,634 contracts in March of last year. Year-to-date options trading volume is down 8 percent from 2011 with 1,061,109,209 contracts.
Futures: Futures cleared by OCC reached 3,517,928 contracts in March, down 18 percent from 2011. Equity futures came in at 688,098 contracts this month, up 44 percent from 2011. Index and other futures reached 2,829,735 contracts, down 25 percent from 2011. OCC is averaging 122,259 cleared futures contracts per day in 2012.
Bats Pushes Derivatives, New Markets as It Reviews IPO
April 1, 2012--Bats Global Markets Inc. (BATS) will offer derivatives trading in Europe and push growth in markets such as Brazil as the third-largest U.S. equity-exchange operator seeks to re-establish credibility after a technical glitch forced it to cancel its initial public offering.
Bats, which also runs the biggest pan-European market after its purchase of Chi-X Europe, could trade derivatives in London as soon as the fourth quarter, Mark Hemsley, chief executive officer of Bats Chi-X Europe, said in an interview. The Lenexa, Kansas-based company is pressing ahead with its plans and will decide on a European clearinghouse to process the transactions in the third quarter. Equity-based contracts will probably be the first to be introduced, he said.
Dubai Gold & Commodities Exchange Weekly Market Commentary-April 1, 2012
April 1, 2012--Economic Data Overview
Oil dominated the headlines over the past week as the prospect of a release of European and US strategic reserves weighted on the market. WTI fell over 3% on the week.
Supplies are now deemed to be ample for President Barak Obama press ahead with his policy of sanctions against countries that import oil from Iran and restrictions on banks who process fund destined for Iran. OPEC has increased oil production and industry analysts suggest there is plenty of supply to meet current demand. Key producers have also been quoted talking down oil prices.
Opinion is divided, as we head into the most important data week of the month, about the strength and sustainability of US growth. Investors have not yet written off the prospect of QE3 which would see gains in both oil and gold prices, but the chances are declining with every passing month.
The first quarter of 2012 has seen the major US stock indices' rally by over 10%. Bonds on the other hand have posted the first quarterly losses since the beginning of last year. The US Federal Reserve engaged in another operation twist this week when it sold short dated debt and bought longer maturities in an attempt to keep mortgage rates lower. This policy is designed to underpin housing prices and boost consumer spending. However, bonds only held up briefly and were sold after the cooperation was completed. Both stocks and bonds are closer to pricing in increased inflationary pressures.
Amongst the growing evidence that the growth outlook for the US will continue to improve is the weekly jobless claims data. This week, the number of unemployed benefit seekers fell to the lowest level since 2008 and there were less people seeking extended benefit payments.
However, last year's final quarter growth at 3% was a little less than the market hoped for and there is continued concern about the pace of growth in corporate profits. This highlighted some temporary bond buying as investors feared that business investment would slow. Surveys of business sentiment have begun to show more positive signs with the Business Roundtable economic outlook index climbing to 96.9 from 77.9 in the previous three quarters. The Thomson Reuters/University of Michigan consumer sentiment index also rose to 76.2 from 75.3.
It is not surprising the Ben Bernanke has to continue to underpin economic confidence. When he spoke this week he stressed that accommodative policies will still be required for a long time. However, in the market, the timing for a Fed hike has come back nine months from late 2014 to the end of 2013. Also some members of the Fed have stressed the need for pre-emptive hikes to make sure that as growth becomes more firmly established, future inflation can be kept under control.
Next week the market will focus on the European unemployment rate which is expected at 10.8%. There are a series of interest rate decisions in Australia, the UK and Europe and no changes are expected. On Friday US Non-Farm Payrolls is expected at 211,000, slightly below last month's number ...
Spotlight on Inequality: Why We Should Care
Inequality is of growing concern to people in rich as well as poor countries
World Bank economist Branko Milanovic: Disparity can hamper growth, threaten social stability
Richest 5 percent of Indians make less than lower middle-class Americans
March 30, 2012--Since World Bank economist Branko Milanovic published his book The Haves and the Have-Nots in early 2011, the discussion over inequality has heated up around the globe.
In the Western world, the focus on disparities in income and opportunity comes as the United States and Europe continue to struggle with a prolonged economic downturn that appears to be widening the gap between rich and poor. It has spurred street protests in Europe and become a lightning rod in the American presidential election.
At the same time, inequality is getting more attention in some developing nations such as China and India that seem to have sailed through the Great Recession relatively unscathed. A growing body of research indicates that growth and decreasing poverty rates in regions such as East Asia are coinciding with rising inequality which, in turn, leads to social tensions.
BRICS Bourses Start Cross-Listing Derivative Indices
BRICS nations start cross-listing emerging market derivatives indices but success depends on liquidity
March 30, 2012--Looking to expand product offerings beyond home markets, five of the world's leading emerging market indices, have started to cross-list derivative indices from Friday.
Brazil’s IBOVESPA futures; Russia’s MICEX Index futures; Hong Kong’s Hang Seng Index futures; and South Africa’s FTSE/JSE Top40 futures got listed on the BSE on Friday.
Part of the common linkage platform, the cross-listing however, could run into the same chicken-and-egg problem that has derailed similar efforts like liquidity.
The idea to give investors in one country exposure to another hot market in their local currency carries appeal, on paper at least