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World grain prices to stay strong-UN's FAO
FAO chief economist warns of possible panic buying
Says Asian demand for animal feed outpaces expectations
After Argentina drought, European dryness raises worries
U.S. soybean futures soar to six-month high
March 26, 2012--World grain prices should remain "very firm" over the near term as demand from Asia exceeds forecasts and dry weather cuts into supply, the senior economist of the U.N.'s Food and Agriculture Organization (FAO) said on Monday.
South American corn and soy yields took a beating from drought this season, while China's rapidly growing middle class continues its love affair with beef steaks. The shift in diet has held strong in the face of the country's economic slowdown, underpinning demand for corn and soymeal used to feed cattle.
Thomson Reuters Selected To Power Dow Jones Indexes' US Index Data Business
Deal Includes Iconic Dow Jones Industrial Average
March 26, 2012--Thomson Reuters today announced that its Elektron high-performance trading and data infrastructure has been selected by Dow Jones Indexes to power the index provider’s US index data business, which includes the iconic Dow Jones Industrial Average.
Elektron will deliver a comprehensive data solution designed to ensure scalability, robustness and performance for Dow Jones Indexes’ real-time US index-data business. The Elektron data integration and distribution solution includes low-latency direct feeds for US index constituent prices along with corporate actions and company fundamentals to support intelligent research and market-moving index calculations.
The deal expands the existing collaboration between the two companies – Thomson Reuters currently supplies real-time data for Dow Jones Indexes’ international indexes.
ETFS Precious Metals Weekly: Gold ETPs See Largest Outflows in 3 Months, Spec Futures Longs Drop Towards April 2009 Lows
March 26, 2012--Global gold ETPs see largest outflows in 3 months as gold price fall shakes out short-term investors. Sustained gold price weakness and a pull-back in broader risk positions caused ETP
investors to pare back gold holdings last week. Total global outflows
amounted to around 0.7mn ounces or around $1.1bn at the current
gold price.
This compares to total gold inflows of around 1.7mn ounces ($2.9bn at current gold price) up until the previous week.
The gold ETP selling coincides with a further large-scale clearing of
speculative futures market positions, with the latest CFTC data (data
to March 20) showing that net speculative longs in the futures
market have dropped back down towards April 2009 lows (see positioning charts on page 4). The gold price decline and investor selling has been sparked by upward revisions to the US rate outlook
(and related US dollar strength) as US economic growth has continued to improve. It appears that shorter-term investors, recognizing the near-term headwinds to further gold price gains
resulting from current improving US growth prospects, are trimming
positions. However, with real interest rates expected to remain
structurally low in most reserve currency countries, sovereign debt
and financial system risks still high and structural demand from
emerging markets and central banks still in their early stages, it is
unlikely the recent price declines will shake out longer-term gold ETP
investors. With net long speculative positions now near April 2009
lows, a firmer base has been set for future long-term price gains.
Indian jeweller strike dents physical demand for gold. Indian jewellers were on strike last week, protesting the doubling of government import duties on imported gold. With jewellers closed, the world’s largest jewellery market remained at a standstill, depriving the gold market of a key source of physical demand.
Platinum group metals slump on Chinese PMI decline. Platinum and palladium prices fell sharply last week on fears of a sharp slowdown in China after the advance PMI manufacturing gauge for March printed below expectations, at 48.1. While the manufacturing sector is softening, it should not be a major concern for platinum group metal investors, as industrial production and fixed asset investment remains robust.
visit www.etfsecurities.com for more info
Dubai Gold & Commodities Exchange Weekly Market Commentary-March 25, 2012
March 25, 2012--Economic Data Overview
For a long time traders knew where the boundaries were in terms of the main drivers behind directional sentiment, but now that has begun to change. The outlook for the US economy is at the centre of this dilemma.
In the last week, the Fed chairman has continued to stress an accommodative narrative and his concern is that household spending needs to increase in the US to help the economy recovery. He has also spoken about the need for further initiatives to address the European crisis, particularly within the banking system, where he believes external balances need to be reduced to spur growth and competitiveness. However, at an Asian investment conference, the St Louis Fed President, James Bullard, stated that US monetary policy may be at a turning point. His focus is on the increased risk of inflation and the difficulty in managing a trend in higher prices, by boosting the economy for too long when the signs of recovery are becoming more apparent with every new month's economic data. His view is closer to the interest rate forward market which anticipates an increase in the US rates between the third and four quarter of 2013 instead of the 2014 projection that Ben Bernanke has forecast.
The major global stock market indices' posted their worst weekly performance of 2012 last week. However, as many of the stock markets have not had a down week in the year so far, aside from last week, that headline in financial news wires is far from ominous. History suggests that the risk of inflation and economic recovery is often best represented by stock market investors, who are looking to future growth rather than current conditions. In the latter stages of most economic down turns stock markets regularly post new highs. Last week, more investment analysts joined the bullish camp and suggested that it was a good time to leave defensive equity holdings and look for growth stocks that will perform as the US economy continues to strengthen
Synthetic route has real appeal
March 23, 2012--When correlations go to one; when securities are hard to borrow; and when banks are looking to do bespoke trades rather than commoditised executions, prime brokers are increasingly turning to a common solution: Delta one.
Delta one is so-named after the Greek symbol that indicates “change”, because it strives to create derivatives for clients that replicate the performance of an underlying instrument – a change of one-to-one. It is also known as “synthetic”, as opposed to “cash”, in which the client owns the underlying instruments directly.
SEC Establishes New Supervisory Cooperation Arrangements With Foreign Counterparts
March 23, 2012--The Securities and Exchange Commission today announced that it has established comprehensive arrangements with the Cayman Islands Monetary Authority (CIMA) and the European Securities and Markets Authority (ESMA) as part of long-term strategy to improve the oversight of regulated entities that operate across national borders.
The two memoranda of understanding (MOUs) reached this month follow on a similar supervisory arrangement that the SEC concluded with the Quebec Autorité des marchés financiers and the Ontario Securities Commission in 2010 and expanded to include the Alberta Securities Commission and the British Columbia Securities Commission last September.
The SEC’s latest supervisory cooperation arrangements will enhance SEC staff ability to share information about such regulated entities as investment advisers, investment fund managers, broker-dealers, and credit rating agencies. The Cayman Islands is a major offshore financial center and home to large numbers of hedge funds, investment advisers and investment managers that frequently access the U.S. market. ESMA is a pan-European Union agency that regulates credit rating agencies and fosters regulatory convergence among European Union securities regulators.
“Supervisory cooperation arrangements help the SEC build closer relationships with its counterparts to cooperate and consult on each other’s oversight activities in ways that may help prevent fraud in the long term or lessen the chances of future financial crises,” said Ethiopis Tafara, Director of the SEC’s Office of International Affairs.
ESMA issues a report on its first examinations of credit rating agencies
March 22, 2012--ESMA today publishes a report (ESMA/2012/207) on the supervision of Credit Rating Agencies (CRAs) registered in the European Union (EU).
The report provides an overview of ESMA’s supervisory activity and summarises the results of the first examinations ESMA conducted in December 2011 of three groups of CRAs, namely Fitch Ratings (Fitch), Moody’s Investor Services (Moody’s) and Standard and Poor’s Rating Services (S&P).
view the ESMA’s Report on the Supervision of Credit Rating Agencies
IOSCO Publishes Updated Systemic Risk Data Requirements for Hedge Funds
MArch 22, 2012--The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published an updated list of categories of data for the global collection of hedge fund information which it believes will assist in assessing possible systemic risks arising from the sector.
The data categories were first published in February 2010 with the first IOSCO hedge fund survey in September 2010.
The Task Force on Unregulated Financial Entities (Task Force) has agreed to conduct a second hedge fund survey in September 2012. In support of this the Task Force has reviewed the categories of data used for the first survey and based on lessons learned and recent legislative developments in the US and Europe, has amended the list of data it will collect for the second survey. IOSCO believes that regular monitoring of hedge funds by securities regulators for systemic risk indicators/measures, such as size, interconnectedness and substitutability, will provide a vitally important time series of data that will help to monitor trends in hedge funds and therefore provide an invaluable insight into any potential systemic risks that hedge funds may pose to the global financial system.
Deutsche Avoids Dodd-Frank Rule
German Bank Restructures U.S. Unit to Avoid New Capital Requirements; Regulators Don't Object.
March 22, 2012--Deutsche Bank AG changed the legal structure of its huge U.S. subsidiary to shield it from new regulations that would have required the German bank to pump new capital into the U.S. arm.
The bank on Feb. 1 reorganized its U.S. subsidiary, known as Taunus Corp., so that it is no longer classified as a "bank-holding company," according to disclosures by the bank and on the U.S. Federal Reserve's website. Deutsche Bank is at least the second large European bank to make such a change, following in the footsteps of the U.K.'s Barclays PLC.
Written Testimony of Secretary Geithner before the House Financial Services Committee on the State of the International Financial System
As Prepared for Delivery
March 20, 2012--Chairman Bachus, Ranking Member Frank, and members of the Committee, thank you for the opportunity to testify today on developments in Europe. Europe is a key strategic and economic partner of the United States, and we have an enormous stake in the success of European efforts to restore financial stability and secure growth.
The U.S. recovery is getting stronger, but the strength of our recovery will depend in part on events beyond our shores, as we saw last year when U.S. growth was buffeted by headwinds from Europe.
Since that time, European leaders have taken a series of steps to address the crisis and we are encouraged by the progress to date. We hope Europe will build on that progress with additional actions to calm the financial tensions that have been so damaging to global economic growth and put in place a stronger framework of policies and institutions to make the European Monetary Union viable over the longer term and help the member countries to strengthen economic growth.
The European Policy Response
With our encouragement and the support of the IMF, Europe’s leaders have put in place a comprehensive strategy to address the crisis. This strategy has the following key elements:
Economic reforms in the member states to restore fiscal sustainability, restructure the banking systems, and improve competitiveness and growth prospects;
Institutional reforms, including the “Fiscal Compact,” that establish stronger disciplines on the fiscal policies of the member states to limit future deficits and debt as a share of GDP;
A coordinated strategy to recapitalize the European financial system, with government guarantees of funding; and
A “firewall” of funds to provide financial support to governments that are undertaking reforms to help assure access to financing on sustainable terms.
These efforts by governments have been reinforced by a substantial amount of support from the European Central Bank.
The European economies at the center of the crisis have made very significant progress.
The causes of the crisis were years in the making and were very different across the continent.