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The global financial crisis has accelerated the shift in economic power to emerging economies.
January 11, 2011--In the latest in the series of PwC’s ‘World in 2050’ reports, analysis reveals that the E7 emerging economies (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) are set to overtake the G7 economies (US, Japan, Germany, UK, France, Italy and Canada) before 2020.
view the World in 2050 The accelerating shift of global economic power: challenges and opportunities
The world in 2050:Can rapid global growth be reconciled with moving to a low-carbon economy?
view the Beyond the BRICs: A broader look at emerging market growth prospects
view the How big will the major emerging market economies get and how can the OECD compete? report
Capital Flows, Exchange Rate Flexibility, and the Real Exchange Rate IMF Working paper
January 10, 2011--This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel cointegration techniques. The results show that public and private flows are associated with a real exchange rate appreciation.
Among private flows, portfolio investment has the highest appreciation effect-almost seven times that of foreign direct investment or bank loans-and private transfers have the lowest effect. Using a de facto measure of exchange rate flexibility, we find that a more flexible exchange rate helps to dampen appreciation of the real exchange rate stemming from capital inflows.
view the Capital Flows, Exchange Rate Flexibility, and the Real Exchange Rate
Composite Leading Indicators (CLIs), OECD, January 2011
January 10, 2011--OECD composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, point to an increasing pace of economic expansion in November 2010.
The CLIs for China, the United States, France and Japan show clear signs of accelerating economic activity, while the one for Russia points strongly to steady expansion.
The German CLI is unchanged from the previous month at a rate above 100 and should therefore be interpreted as a sign of a continued, stable pace of expansion. Signs of stabilization in the pace of economic expansion are also present in the CLIs for Canada, Italy, the United Kingdom and India.
HK price differentials create renminbi openings
January 10, 2011--Banking regulators have quietly taken a major step towards harmonised global regulation by agreeing to raise worldwide capital requirements whenever an individual country declares a credit bubble.
Part of the larger Basel III banking reform package, the countercyclical capital buffer heralds a step change in the way national banking regulators interact and is the first concrete example of “macroprudential” regulation that seeks to moderate the economic cycle.
NYSE Euronext Announces Trading Volumes for December 2010
Global Derivatives Averaged 6.7 Million Contracts per Day in December, Down 6% vs. Prior Year;
European Cash Trading Volumes Up 13%, U.S. Cash Down 14%
January 6, 2011-- NYSE Euronext (NYX) today announced trading volumes for its global derivatives and cash equities exchanges for December 2010 [1] Global derivatives average daily volume (“ADV”) of 6.7 million contracts traded per day in December 2010 decreased 6.2% versus the prior year.
The decrease in global derivatives ADV versus prior year levels was driven primarily by a 17.7% decrease in European derivatives, partially offset by an 8.7% increase in U.S. equity options ADV. Cash equities ADV in December 2010 was mixed, with European cash ADV increasing 12.9% and U.S. cash trading volumes decreasing 13.5% from December 2009 levels.
Highlights
NYSE Euronext global derivatives ADV in December 2010 of 6.7 million contracts decreased 6.2% compared to December 2009 and decreased 19.1% from November 2010 levels.
Smaller hedge funds to enjoy inflows
January 6, 2011-Financial News reports, small and medium-sized managers are set to be the main beneficiaries this year from investors putting money into hedge funds as a result of reduced competition for assets from larger firms, according to new research.
For the past two years, the largest hedge funds have raised most of the money that have gone into the sector. In the third quarter, more than $14bn of the $19bn total net inflow was allocated to firms with more than $5bn in assets under management, which manage more than 60% of total industry capital, according to data provider Hedge Fund Research.
Hedge Funds Increase Bullish Crude Bets to Four-Year High
January 6, 2011--Hedge funds raised bullish bets on crude oil to the highest level in more than four years on speculation that futures will climb as the U.S. recovers from the deepest recession since the 1930s.
The funds and other large speculators increased net-long positions, or wagers on rising prices, by 4.6 percent in the seven days ended Dec. 28, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the biggest total in records going back to June 2006.
BNY Mellon Asset Servicing Tops $200 Billion in ETF Assets under Administration
Assets Grow 46 Percent in 2010
January 6, 2011--BNY Mellon Asset Servicing, the global leader in securities servicing, has exceeded $200 billion in exchange-traded fund (ETF) assets under administration, an increase of 46 percent since the beginning of 2010. BNY Mellon is the largest global administrator for ETFs in terms of funds serviced and sponsors supported, providing services to 400 products in the U.S. and nearly 500 total separate portfolios worldwide.
"Rapid innovation, growing investor interest in ETFs, the continuing upturn in the world's capital markets, and the demonstrated commitment that BNY Mellon has made to the ETF servicing business have all combined to drive this remarkable growth," said Joseph Keenan, managing director for BNY Mellon Asset Servicing and head of its global ETF services business.
Keenan noted ETFs that track emerging markets indices and those offering exposure to commodities and fixed income instruments were among the fastest growing segments of the global ETF services business. He added, "We expect this trend to continue. We will work closely with our clients and new sponsors to educate them about the features of ETFs.
"We will continue to invest in our industry-leading technology as we extend our capabilities to serve the widest array of ETFs and other exchange-listed products," said Keenan. "ETFs have demonstrated their growth potential on a global scale, and we believe BNY Mellon is uniquely positioned to support this rapidly expanding market."
ICFR Regulatory Round Up: Economic Growth Crucial for Progress on Financial Regulation in 2011
January 6, 2011--The current battle between the financial markets and European Union (EU) politicians over the value of the debt of some of its members and the future of the Euro itself has moved Europe back to crisis mode at the end of a year that should have been about regulatory implementation. Re-regulation this year has been influenced by regulatory capture, shifting political priorities, worries about growth and growing tensions among the G20 members. The real work of implementation will begin in 2011,
including the inauguration in January 2011 of the new European supervisory authorities. Implementation will continue to be subject to debate about the economic impact of the new rules and the costs of the uncertainty surrounding their implementation and enforcement. This will also encompass ongoing worries about the fragility of the recovery, and the need to have a fully functioning financial system to be able to handle the refinancing of significant amounts of maturing government and bank debt in the next 12 to 18 months.
As we close 2010, we see a raft of consultations and regulations, including: rule-writing assigned to the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) by the US Dodd-Frank Act; details on global regulatory standards on capital adequacy and liquidity from the Basel Committee on Banking Supervision (BCBS); a review of the Markets in Financial Instruments Directive (MiFID) in Europe, as well as papers on issues of remuneration, crisis resolution, and the passage of the Alternative Investment Fund Management (AIFM) Directive.
The above mentioned will be overlaid with the new objectives of France’s twelve-month tenure of the G20 – an extended tenure to permit the G20 to re-establish some momentum. It is absolutely critical that attention to new goals does not diminish the energy behind solutions to open regulatory issues such as cross border crisis resolution, and the development of tools and measures for macroprudential supervision. It is also vital – if the G20 is to maintain its credibility with the members included by enlargement of the G7 – that due attention is given to the issues of the new member states.
OECD annual inflation rate eases slightly to 1.8% in November 2010
January 6, 2011--Consumer prices in the OECD area1 rose by 1.8% in the year to November 2010, down from 1.9% in October. This easing in the rate of inflation mainly reflected slower growth in energy prices, which increased by 5.4% in November, compared with 6.6% in October. Food prices rose by 2.7% in November, up from 2.6% in October.
Excluding food and energy, consumer prices rose by 1.2 % in November compared with 1.1% in October.
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