Global ETF News Older than One Year
Determinants of Emerging Market Sovereign Bond Spreads: Fundamentals vs Financial Stress- IMF Working paper
December 7, 2010--Summary: This paper analyses the determimants of emerging market sovereign bond spreads by examining the short and long-run effects of fundamental (macroeconomic) and temporary (financial market) factors on these spreads. During the current global financial and economic crisis, sovereign bond spreads widened dramatically for both developed and emerging market economies.
This deterioration has widely been attributed to rapidly growing public debts and balance sheet risks. Our results indicate that in the long run, fundamentals are significant determinants of emerging market sovereign bond spreads, while in the short run, financial volatility is a more important determinant of sperads than fundamentals indicators.
Source: IMF
Into the Great Unknown: Stress Testing with Weak Data IMF Working paper
December 7, 2010--Stress testing has become the risk management tool du jour in the wake of the global financial crisis. In countries where the information reported by financial institutions is considered to be of sufficiently good quality, and supervisory and regulatory standards are high, stress tests can be of significant value.
In contrast, the proliferation of stress testing in underdeveloped financial systems with weak oversight regimes is fraught with uncertainties, as it is unclear what the results actually represent and how they could be usefully applied. In this paper, problems associated with stress tests using weak data are examined. We offer a potentially more useful alternative, the "breaking point" method, which also requires close coordination with on-site supervision and complemented by other supervisory tools and qualitative information. Excel spreadsheet templates of the stress tests presented in this paper are provided.
view the Into the Great Unknown: Stress Testing with Weak Data
Source: IMF
Crude oil tipped to bubble over $100 a barrel
November 7, 2010--For the first time in two years, oil bulls are starting to outnumber bears.
The bulls’ push comes as the oil market is experiencing a “demand shock”, with consumption growth this year accelerating to almost its highest rate in 30 years
This unexpected boom in demand has lifted benchmark oil prices sharply higher, to a 26-month high of more than $90 a barrel on Tuesday. Some traders believe the market could jump to $100 within weeks.
Source: FT.com
Gold hits new high
December 7, 2010--Spot gold reached a new high in afternoon trade on Tuesday, reaching a best level of $1 431.30 troy ounce, before tapering off to its most recent trade at $1 419.05/oz.
Rallies in gold was spurred by momentum buying, so may be vulnerable if markets see a swift change in sentiment, Commerzbank analyst Eugen Weinberg told Dow Jones Newswires.
Source: FIN24
Oil hovers near $88 in Asia amid economic optimism
December 6, 2010--– Oil prices hovered near $88 a barrel Friday in Asia, with losses tempered by hopes of strong growth in demand for crude and Europe's progress in containing its debt crisis.
Benchmark oil for January delivery was down 35 cents to $87.60 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract rose $1.25 to settle at $88 a barrel on Thursday, just shy of the 2010 high of $88.29.
Signs the U.S. economy is gaining strength have spurred a rally on Wall Street this week, and that in turn drove oil prices up. U.S. manufacturing activity, retail sales and the housing market all improved. And while more Americans applied for unemployment benefits last week, the average over the past month fell to a two-year low.
Source: Associated Press
IMF Working paper-U.S. Monetary Shocks and Global Stock Prices
December 6, 2010--This paper studies how U.S. monetary policy affects global stock prices. We find that global stock prices respond strongly to changes in U.S. interest rate policy, with stock prices increasing (decreasing) following unexpected monetary loosening (tightening).
This impact is more pronounced for sectors that depend on external financing, and for countries that are more integrated with the global financial market. These findings suggest that financial frictions play an important role in the transmission of monetary policy, and that U.S. monetary policy influences global capital allocation.
view the U.S. Monetary Shocks and Global Stock Prices IMF Working paper
Source: IMF
Managing Public Debt and Its Financial Stability Implications- IMF Working paper
December 6, 2010-Summary: This paper explores the relationship between the level and management of public debt and financial stability, and explains the channels through which the two are interlinked.
It suggests that the broader implications of a debt management strategy and its implementation should be carefully analyzed by debt managers and policy makers in terms of their impact on the government’s balance sheet, macroeconomic developments, and the financial system.
view the Managing Public Debt and Its Financial Stability Implications working paper
Source: IMF
World Bank and IMF Launch Quarterly Online Public Sector Debt Database
December 6, 2010--The World Bank and the International Monetary Fund (IMF) today launched the online Quarterly Public Sector Debt Database, which offers access to public sector debt statistics for 30 emerging market and developing countries and will be updated every three months.
Increased focus on public sector debt sustainability and fiscal consolidation globally has heightened interest in public sector debt statistics. This database is unique in bringing together public sector debt statistics that otherwise are only available from individual countries in a range of different formats, providing policymakers and market participants with information suitable for cross-country comparisons.
The database promotes consistency and comparability across countries through standardized treatments of coverage, valuation, and classification, including clearly defined tiers of debt where appropriate for central, state and local government as well as public corporations.
view the World Bank Public Sector Debt Statistics
Source: World Bank
Global Corporate Rating Activity-Third-Quarter 2010
December 3, 2010--Summary
First-half global corporate (industrial and financial institution) rating trends held firm in the third quarter as industrials, emerging market issuers, and speculative grade
borrowers all continued to enjoy the bulk of the year’s credit gains. However, across all of these areas, the pace of upgrades slowed as developed market economies, in particular, struggled anew to restore economic activity to pre-crisis levels.
Across financial institutions, the rating drift remained negative in the third quarter, although not measurably worse than in the first half of the year. The combined effect of continued pressure on financial institutions and fewer upgrades among industrials was a reversal of the previous two quarters’ trend of upgrades topping downgrades. In the third quarter, rating activity was essentially flat with global corporate upgrades nearly even with downgrades.
Source: Fitch Ratings
Thomson Reuters to push ESG data out to 45,000 buy and sell-side analyst clients
December 3, 2010--Thomson Reuters is to push out environmental social and governance (ESG) data to about 45,000 buy & sell side investment analyst clients via its Datastream service as its ramps up its move into the sector following its acquisition a year ago of Asset4, the Swiss ESG research house. The company said it would include a subset of Asset4’s data on Datastream, a set of cross-asset analysis tools, from the first quarter of 2011.
Henrik Steffensen, vice president marketing and business development at Asset4, said analysts would be able to access quantitative ESG data and use it to make correlations with existing financial information. He said analyst clients would not have access to further information such as Asset4’s policy reports or more specialist ESG information, which will remain premium products.
Source: Responsible Investor
