Global ETF News Older than One Year
ETFS Precious Metals Weekly: Gold Price Nears $2000/oz as Sovereign Risk Concerns Spike
September 6, 2011--Gold price hits all-time high of $1,921/oz as sovereign crisis escalates. The gold price surged through previous all-time highs in early London trade as global
markets continue to reel from growing concerns that Europe’s sovereign crisis is may spiral out of control. Measures of European banking sector risk have surged back to early 2009 levels and Italian, Spanish and peripheral European sovereign debt spreads have widened further.
Weak global growth data raises concerns of further fiscal and sovereign debt deterioration. The trigger for the most recent bout of risk aversion has been a growing stream of weaker than expected global growth indicators, starting with a weak US payrolls report on Friday and followed by weak PMI releases in Europe on Monday. Slower growth puts further onus on central banks to initiate new rounds of quantitative and other forms of extraordinary monetary easing. Missed Greek fiscal targets, concerns Italy may be losing its fiscal resolve, Finnish demand for collateral for further loans to Greece and a continued lack of a cohesive policy response to the crisis by European leaders has added to the upheaval.
This week all eyes will be on central bank activity with ECB and BOE meetings scheduled and Bernanke due to speak on Thursday. Hints of moves towards further easing are likely, though without concrete new measures to deal with Europe’s deteriorating fiscal and sovereign debt issues, there is a growing risk that events spiral out of their immediate control.
visit www.etfsecurities.com for more info
Source: ETFS Securities
New Study Finds Strong European Demand For U.S. Listed Equity Options
September 6, 2011--The Options Industry Council (OIC) today presented the results of the study, European Demand for U.S. Listed Equity Options, conducted by Tabb Group and commissioned by OIC. The study found that 10 percent of U.S. listed options volume originates from Europe today, and this amount is likely to increase as a result of global regulatory efforts to reduce risk.
The Tabb Group also found that European investors believe U.S. listed options markets are liquid, transparent and deliver unparalleled execution quality. Tabb expects continued demand for U.S. options from European institutional investors because of their broad exposure to U.S. equities. European holdings of U.S. equity-related securities total $1.3 trillion, equal to 46 percent of total foreign ownership of U.S. equities.
There are, however, barriers to the trading of U.S. listed options in Europe, including unfamiliarity with the trading process and U.S. options market structure. This presents a challenge and opportunity for OIC in its mission to educate investors in the responsible use of equity options.
To access OIC's summary and the full study (registration required), visit: http://optionseducation.org/tabb
Source: Options Industry Council (OIC)
Traders on edge over return of La Niña
September 6, 2011--The US National Weather Service on Thursday warned that La Niña, the weather condition that caused turmoil in the commodities markets this year, had returned and was likely to strengthen throughout the rest of the year.
La Niña, caused by a fall in water temperature in the tropical Pacific, typically triggers wetness in eastern Australia, and drier than normal conditions in the midsection of the US and countries in the southern hemisphere including Brazil and Argentina.
Source: FT.com
Bullion tumbles on Swiss move
September 6, 2011--Gold prices tumbled more than 2.5 per cent in a matter of minutes after the Swiss central bank said it would put a ceiling on the strength of the franc for the first time in more than three decades.
Measured in Swiss francs, gold rose to SFr1,631.55 a troy ounce ...
Source: FT.com
China, EU leaders discuss eurozone debt crisis
September 2, 2011--European Commission President Jose Manuel Barroso and Chinese Premier Wen Jiabao spoke by phone on Friday on the steps the eurozone is taking to resolve the debt crisis, an EU spokesman said.
The two leaders discussed the global economic situation and EU-China relations ahead of a bilateral summit in October and the meeting of Group of 20 heads of state and government in Cannes, France in November, the spokesman said.
Source: EUbusiness
Apocalypse Then: The Evolution of the North Atlantic Economy and the Global Crisis-IMF Working paper
September 2, 2011--Summary: The financial crisis, originated from the collapse of US housing markets in 2008, reverberates around the world. Its destructive force was felt nowhere more keenly than Western Europe.
Indeed, it continues to mire in financial volatility as the debt problem contagiously spreads around the periphery Euro area. Taking a wider historical view of the evolution over the recent decades of the North Atlantic economy, comprising North America and Western Europe, we argue that while trade links were in relative stasis, the increasing and uniquely-close Transatlantic financial relationship was a crucial conduit in transmitting US shocks into global ones.
Source: IMF
Consolidated Spillover Report - Implications from the Analysis of the Systemic-5
September 2, 2011--OVERVIEW
Spillover reports explore the external effects of policies in five systemic economies based on the issues identified by partners. Without reprising all the results (Box 1) and nuances, this paper draws some overarching lessons from the exercise for the global policy debate:
Short-term policy spillovers hinge on their effects on financial markets. When the financial system is stressed and there is fiscal space, as in 2008-09, macroeconomic stimulus makes sense and yields significant positive spillovers.
But this is no longer the case once fiscal space recedes. The external demand spillovers from fiscal consolidation in advanced economies would be small in comparison to those that would follow from compromised fiscal credibility.
Given the importance of financial channels in the propagation of global shocks, and the centrality of US-UK-European financial core, stronger and more coordinated regulation in the core is essential.
China and Japan spillovers are mostly expressed through real channels that take longer to play out but failure to address stresses and distortions can reverberate globally; Japan’s fiscal strains could, however, propagate rapidly via financial channels.
view the IMF Report-Consolidated Spillover Report - Implications from the Analysis of the Systemic-5
Source: IMF
Goldman's Memo on how to Cash in on Euro Crisis
September 2, 2011--Goldman Sachs showered its hedge fund clients with ideas on how to profit from financial chaos in the eurozone, as markets gyrated wildly last month.
The giant investment bank provided ideas for complicated derivatives trades that would pay off if confidence ebbed in the soundness of the European banking system, and a top trading strategist told clients he believed the banks would need $1 trillion of extra capital to weather the crisis.
Source: The Independent
Investors Gear Up For Possible Rate Cuts In Emerging Markets
September 2, 2011--Investors are preparing for the possibility of interest-rate cuts in emerging markets, a shift that would mark a sudden reversal in monetary policy in countries where central banks have in recent months been on rate-raising campaigns.
Brazil's central bank set the ball rolling Wednesday with a surprise reduction that came sooner than markets had expected, bringing its target Selic rate down by 50 basis points to 12%.
Source: Wall Street Journal
Diw Jones-UBS Commodity Indexes- August 2011 Performance Report
August 1, 2011--The Dow Jones-UBS Commodity Index was up 0.99% for the month of August. The Dow Jones-UBS Single Commodity Indexes for Coffee, Corn and Gold had the strongest gains with month-end returns of 18.51, 13.57%, and 12.29%, respectively.
The three most significant downside performing single commodity indexes were Orange Juice, Tin and Nickel, which were down 17.48%, 13.28%, and 11.25% respectively, in August.
Year to date, the Dow Jones-UBS Commodity Index is up 1.26% with the Dow Jones-UBS Silver Sub-Index posting the highest gain of 34.61% so far in 2011. Dow Jones-UBS Wheat Sub-Index has the most significant downside YTD performance, down 16.83%.
Source: Dow Jones Indexes
