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OECD annual inflation rate picks up to 3.3% in September 2011
November 2, 2011--Consumer prices in the OECD area rose by 3.3% in the year to September 2011, compared with 3.2% in the year to August - the highest rate since October 2008. Excluding food and energy, the annual inflation rate rose by 1.9% in September, compared with 1.8% in August - the highest rate since April 2009.
Energy prices rose by 14.2% in the year to September, up from 13.5% in the year to August. However, this acceleration in energy prices was partly offset by slower rise in food prices: 4.2% in the year to September, down from 4.6% in the year to August.
IMF to publish analysis on imbalances, currencies
November 1, 2011--The International Monetary Fund said on Monday it will begin publishing regular analyses of global economic imbalances and exchange rates as part of a growing role, a move that could draw it deeper into difficult international disputes.
Global policymakers have called on the IMF to play a greater role in policing the global economy in the face of a global financial crisis and recession in 2009 and the rising influence of emerging economies.
The IMF unveiled its plans to increase monitoring, and report on its findings, just days before a summit of leaders from the Group of 20 major economies.
NASDAQ OMX: New Monthly Record For Carbon Futures In October
November 1, 2011--Trading and clearing of carbon futures amounted to 9,149 contracts (9,149,000 tons) in October 2011.
This is the highest monthly volume ever traded and cleared on NASDAQ OMX Commodities Europe carbon futures market in the course of one month.
FTSE Diversification Based Investing (DBI) Index Series. Expanded to Include Emerging Markets.
November 1, 2011--FTSE Group (“FTSE”), the award winning global index provider, and QS Investors, LLC, an independent investment firm providing asset management and advisory services to institutional clients, today jointly announce the expansion of the FTSE Diversification Based Investing (DBI) Index Series to include emerging markets.
With the addition of an Emerging Markets Index, the series now offers truly global coverage.
Like the FTSE DBI Developed indices, launched in September 2010, the FTSE DBI All Emerging Markets Index is non-market capitalization weighted. Instead, the FTSE DBI indices are weighted to promote diversification across countries and industry sectors. They seek higher absolute and risk-adjusted returns compared to market cap-weighted indices with less downside risk. The investment philosophy behind the FTSE DBI Index Series is that both geography and industry are the primary drivers of global equity risk and return; and that market sentiment can lead to momentum effects, causing concentration risk in market-cap weighted indices. A macro diversified portfolio helps to avoid this concentration risk and should lessen downside risk. Using a transparent, rules-based formula, the indices diversify exposure by re-weighting countries and industries to avoid concentration risk and momentum effects. Risk assessment occurs annually and index rebalancing occurs quarterly.
Average daily volume of 10.7 million contracts at Eurex Group in October
Eurex Repo: GC Pooling and Euro Repo market with new records
November 1, 2011--In October 2011, the international derivatives exchanges of Eurex Group recorded an average daily volume of 10.7 million contracts (October 2010: 9.2 million). Of those, 7.3 million were Eurex Exchange contracts (October 2010: 6.3 million), and 3.4 million contracts (October 2010: 2.9 million) were traded at the U.S.-based International Securities Exchange (ISE).
The growth of 17 percent y-o-y is due to stronger hedging need of market participants driven by uncertainty resulting from the European sovereign debt crisis, which led to an increasing use of exchange-traded and centrally cleared derivatives in the current market environment. In total, 153.9 million contracts were traded at Eurex Exchange and 72.1 million at ISE.
At Eurex Exchange, equity index derivatives as the largest segment recorded 82.3 million contracts (October 2010: 57.7 million), an increase of 43 percent y-o-y. The future on the EURO STOXX 50 Index totaled 31.3 million contracts, its best monthly result year-to-date. The option on this blue chip index totaled 36.4 million contracts. Futures on the DAX index recorded 3.8 million contracts. The DAX options reached another 5.3 million contracts. The Eurex KOSPI product recorded 2.4 million contracts, an ADV of nearly 120,000 contracts – a new monthly record since product launch.
Carbon Disclosure Project invites most populated cities to report water information for first time
November 1, 2011--The Carbon Disclosure Project (CDP) has invited 140 of the world’s most populated cities to report information on their greenhouse gas emissions and climate change strategies, as part of the second annual disclosure cycle of its CDP Cities program. CDP is also asking cities, for the first time, to report on their water use and water risks alongside their carbon and climate change activities, due to the significant risk this finite resource poses to cities.
Now in its second year, CDP Cities provides a transformative global system that enables cities around the world to voluntarily measure, disclose and track their progress on reducing greenhouse gas emissions and managing climate change risk. This year the number of cities invited to participate has risen to 140, up from 58 cities last year. For the second year running, CDP Cities is partnering with the C40 Cities Climate Leadership Group (C40), a group of the largest cities in the world dedicated to tackling climate change, to provide the preferred reporting platform for these progressive cities. CDP Cities is also inviting many of the largest cities by population in North America, Europe, Africa, Latin America and Australasia.
The Options Industry Council Announces October Volume Increased 14 Percent
November 1, 2011--The Options Industry Council (OIC) announced today that 390,982,436 total options contracts changed hands in October, a 14.32 percent increase over October of last year when 342,006,211 contracts were traded.
Average daily volume in October was 18,618,211 contracts, 14.32 percent more than the 16,286,010 contracts in October 2010. Year-to-date volume through October stood at 3,898,045,930 contracts compared to 3,205,815,947 contracts traded in the same period last year, representing a 21.59 percent increase. Year-to-date average daily volume was 18,562,123 contracts, up 21.01 percent over 15,338,832 contracts through October of last year.
OIC also reported equity options volume experienced an increase of 12.82 percent with 360,081,121 contracts exchanged in October compared to 319,169,334 contracts for the same year-ago period. Equity options volume on average each day in October was 17,146,720 contracts, up 12.82 percent compared to 15,198,540 contracts for the same month last year. Year-to-date equity options volume through October stood at 3,608,405,887 contracts compared to the same point last year when 2,961,173,470 contracts were traded, representing a 21.86 percent increase.
ISDA Statement On CDS Credit Event Process
October 31, 2011--The International Swaps and Derivatives Association, Inc. (ISDA) today issued the following statement in order to ensure an accurate understanding of how credit events are determined for credit default swaps contracts.
Today’s statement is intended to underscore key points articulated in the Greek Sovereign Debt Q&A, updated on October 31, which discussed this issue with regards to the Eurozone proposal for Greek debt. Some media accounts of the information contained in the Q&A inaccurately described the credit event process.
The determination of whether a credit event occurs under CDS documentation is made by the relevant ISDA Determinations Committee (DC), which consists of 10 sell-side and five buy-side firms. ISDA serves as secretary to, but does not sit on, the DC. A supermajority of votes (12 of 15 DC members) is required to find that a credit event has occurred without the decision being subject to external legal review. A weaker majority decision would be subject to external legal review that might overturn such a determination.
The DC’s review of a potential credit event comes after a proposal has been announced and its final terms are publicly available and only if a market participant requests the DC to take up the matter. Neither of these has yet occurred with regards to the Greek sovereign debt situation. No debt issued by the Hellenic Republic has been modified to date, nor have the formal terms for any such modification under the Eurozone proposal yet been released. No market participant has yet made such a request to the DC.
Investors seek dollar havens after yen action
October 31, 2011--Currency markets were in risk aversion mode on Monday, but investors were limited in their choice of havens after Japan's intervention to weaken the yen left the dollar as the next best safe bet.
Japan's third foray into the foreign exchange markets to weaken the yen this year was prompted after the currency rose to a new high versus the dollar - with the US currency falling as low as Y75.35.
Financial Stability Board Publishes Recommendations To Strengthen Oversight And Regulation Of Shadow Banking
October 27, 2011--The Financial Stability Board (FSB) published today a report on Shadow Banking: Strengthening Oversight and Regulation. This report provides the FSB’s recommendations on this subject that were requested by the G20 Leaders at the November 2010 Seoul Summit.
The “shadow banking system” can broadly be described as “credit intermediation
involving entities and activities outside the regular banking system.” According to one measure, the global shadow banking system grew rapidly before the crisis, from an estimated $27 trillion in 2002 to $60 trillion in 2007, and remained at around the same level in 2010.1
Intermediating credit through non-bank channels can have advantages, for example by providing an alternative source of funding and liquidity. However, as the recent financial crisis has shown, the shadow banking system can also be a source of systemic risk both directly and through its interconnectedness with the regular banking system. It can also create opportunities for arbitrage that might undermine stricter bank regulation and lead to a build-up of additional leverage and risks in the overall financial system. Enhancing supervision and regulation of the shadow banking system in areas where systemic risk and regulatory arbitrage concerns are inadequately addressed is therefore important.