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ECB and other central banks decide to continue conducting US dollar liquidity-providing operations
September 24, 2009--The Governing Council of the European Central Bank (ECB) has decided, in agreement with other central banks including the Federal Reserve, to continue conducting US dollar liquidity-providing operations from October 2009 to January 2010.
These Eurosystem operations will continue to take the form of seven-day repurchase operations against ECB-eligible collateral and to be carried out as fixed rate tenders with full allotment. Given the limited demand and the improved conditions in funding markets, the US dollar operations with a term of 84 days will be discontinued following the operation to be held on 6 October 2009 and maturing on 7 January 2010. The 84-day operations, as well as the other US dollar liquidity-providing operations that were previously discontinued, could be started again in the future if needed.
A similar decision has been taken by the Bank of England and the Swiss National Bank.
The consolidated calendar for euro, US dollar and Swiss franc operations of the Eurosystem is available on the ECB’s website.
Information on related announcements by other central banks is available on the following websites:
Federal Reserve: -http://www.federalreserve.gov
Bank of England: -http://www.bankofengland.co.uk
Bank of Japan: http://www.boj.or.jp/en
Swiss National Bank: http://www.snb.ch
September 2009 “Market’s Measure” - Preliminary Report - A Monthly Report From Dow Jones Indexes And STOXX Ltd. On The Performance Of - U.S., European, Asia And Other Global Stock Market Indexes
Dow Jones Industrial Average Posts 2.66% Gain in SEPTEMBER, European Stocks Gain 3.13%, Asia Rises 4.92% and World Equities Rise by 4.40%
Basic Materials Sector Posts Biggest Gain for September in U.S.
Health Care Sector Post the Narrowest Gain for September in U.S.
September 24, 2009--As of September 23, the Dow Jones Industrial Average rose 2.66% in September, closing at 9748.55. Stock market indexes in Europe, Asia and globally were up in September, according to preliminary monthly figures from global index providers, Dow Jones Indexes and STOXX Ltd.
SEPTEMBER 2009 Sector Winners and Losers
Gold Gains in London as Dollar Drop Against Euro Spurs Demand
September 24, 2009-Gold gained in London as the dollar weakened against the euro, increasing the metal’s appeal as an alternative investment.
The dollar fell as much as 0.4 percent against the euro as a report showed German business confidence rose to a 12-month high this month. Bullion has climbed 15 percent in 2009, while the dollar, which yesterday slid to the lowest level in a year against the single European currency, has lost 5.4 percent
“The dollar and risk sentiment will continue to lead gold in coming sessions,” James Moore, an analyst at TheBullionDesk.com in London, said in a note. The metal is “well placed to set fresh highs,” he said.
Gold near 2-week low as dollar bounces, ETF falls
Drop in oil, stocks dampen gold's inflation hedge allure *
Wary of long futures positions as quarter-, month-end near
SPDR Gold holdings XAUEXT-NYS-TT fall 0.7 percent
September 24, 2009--Gold hovered near two-week lows on
Friday as a rebound in the dollar dampened bullion's appeal as a
currency hedge while investors were becoming wary of speculative
long positions building in futures.
Sluggish stocks and falling oil prices to 8-week lows on
worries about the economy also took away some of gold's allure as
a hedge against inflation.
September 2009 “Islamic Market’s Measure” – Monthly Report On The Performance Of The Dow Jones Islamic Market Indexes
September 23, 2009--Based on the close of trading on September 22, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, gained 4.25% month-to-date, closing at 2011.06. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a gain of 4.80%, closing at 167.25.
- The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, increased 1.33%, closing at 1698.43. The Dow Jones Asian Titans 50 Index, in comparison, posted a gain of 1.68%, closing at 126.34.
- Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1947.86, a gain of 3.79%, while the pan-European blue chip Dow Jones STOXX 50 Index gained 6.53%, closing at 2584.76.
- Measuring the performance of 50 of the largest Shari’ah compliant U.S. stocks, the Dow Jones Islamic Market U.S. Titans 50 Index increased, closing at 1969.58. It represents a gain of 1.77%. The U.S. blue-chip Dow Jones Industrial Average increased 4.01%, closing at 9539.29.
Asia: Performance of Dow Jones Islamic Market Versus Conventional Dow Jones Indexes
Middle East and GCC Regions
Dow Jones Islamic Market Indexes Versus Conventional Dow Jones Indexes In August, the Dow Jones DFM Titans 10 Index, measuring the 10 largest and most liquid stocks listed on the Dubai Financial Market, closed at 2381.27. It is a gain of 1.37% month-to-date.
The Dow Jones Islamic Market Kuwait Index posted a gain of 6.95%, closing at 1045.73. Its conventional counterpart index, the Dow Jones Kuwait Composite Index, was up, closing at 251.32. It represents a gain of 7.30%.
Dow Jones Indexes Commodity Outlook
September 23, 2009--The Dow Jones-UBS Commodity Total Return Index is up 6.94% so far this year, as of September 21, 2009. Leading commodity analysts provided their market outlook for the remainder of 2009 and for the beginning of 2010 this morning at the third annual Dow Jones Indexes Commodity Outlook in Paris.
Rising oil prices, though a threat to global recovery, could go higher "Given lax monetary conditions and massive capital inflows, oil prices are likely to move higher in the short run," said Benoît Cougnaud, president and financial risks management specialist, Azurris Risk Advantage. "The recent increase in oil prices might attract wider ranges of investors, feeding a further rise in crude oil prices. However, rising oil prices weigh on consumers and companies' margins. A rise in oil prices towards even more excessive levels could be quite counterproductive at a time when economic recovery plans are progressively coming to an end, with no prospect for sustained rebound in private consumption and investment," Cougnaud added. "Therefore, we think that the current recovery is too fragile to bear such disconnected and excessive oil prices."
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IOSCO Consults On Transparency of Structured Finance Products
September 23, 2009--The International Organisation of Securities Commissions (IOSCO) Technical Committee has published a consultation report on Transparency of Structured Finance Products. The Report sets out a number of factors to be considered by market authorities when considering enhancing post-trade transparency of structured finance products in their respective jurisdictions.
The Technical Committee is seeking input from financial services practitioners, industry participants and other relevant stakeholders.
The closing date for responses is 13 November 2009.
Summary
The report was prepared following the Subprime Task Force’s mandate in 2008 to the Technical Committee Standing Committee on the Regulation of Secondary Markets to examine the viability of a secondary market reporting system for structured finance products (SFPs), with a particular focus on the nature of the market and its participants as well as on the potential benefits and drawbacks of such a reporting regime. In preparing the report information was solicited from a variety of sources in the financial services industry across several jurisdictions.
Currently, a mandated post-trade transparency regime for SFPs does not exist in any member jurisdiction, although some pricing information on SFPs is available from a number of sources. Whilst there are divergent views on the possible benefits and drawbacks of a post-trade transparency regime, the Technical Committee believes that greater information on traded prices of SFPs could be a valuable source of information for market participants. It therefore encourages each member jurisdiction to actively consider enhancing post-trade transparency in its own jurisdiction.
view the TRANSPARENCY OF STRUCTURED FINANCE PRODUCTS report
WFE Board urges consistent regulation and more transparency from G20 market reform efforts
September 22, 2009--The World Federation of Exchanges (WFE) Board of Directors urged leaders of the G20 nations at their upcoming summit in Pittsburgh, Pennsylvania (USA), to press for market reforms that enhance transparency and create more uniform rules between exchange-traded and less-regulated markets.
In a letter to the G20 signed by WFE Chairman William J. Brodsky, the WFE Board applauded the efforts of the G20 leaders to improve unregulated markets and products by advocating the use of clearing houses and exchanges where risks can be better managed and prices are transparently set. Mr. Brodsky is Chairman and CEO of the Chicago Board Options Exchange.
“At the end of the day, all investors need to have confidence in the reliability of information reflected in the prices at which securities transactions occur,” said Mr. Brodsky. “The heightened opacity of certain market operations in many countries inhibits price discovery and may lead to negative outcomes, such as increased volatility.”
Specifically, the WFE urged G20 leaders to focus on the following points:
Absence of a Level Playing Field:
WFE recommends that the G20 leaders consult with investor organizations about how they would wish to see orders executed in the markets, and determine whether alternative trading venues have reduced the total costs of transacting by investors.
WFE also asks G20 leaders to assure a level playing field for the responsibilities assumed by all securities market order execution venues. This would remedy many capital markets uncertainties, assuring greater transparency, greater fairness and a more level competitive field.
Reduced Market Transparency:
Impact of Dark Pools The WFE Board asks that G20 also focus on issues related to dark pools and take remedial action in those countries concerned.
WFE, the Financial Stability Board (FSB), and global financial standards bodies: the WFE Board expressed its support for many of the capital markets reforms being circulated by the Financial Stability Board; WFE also supports the FSB objective of having independent financial standards bodies set robust norms for our global financial system.
Importantly WFE asked that the G20 should agree on ways to avoid regulatory arbitrage between national financial market regulations around the world.
“Since the first months of the financial crisis, the WFE Secretariat has regularly made itself available to the FSB as an information resource on exchange-operated markets – reviewing the key statistics, and also commenting on the changing composition of those numbers. We stand ready to continue to play this role and to assist in any way that we can in the reform and rebuilding of the global financial system” Mr. Brodsky concluded.
A full copy of the WFE’s letter to G20 can be accessed at here
FTSE Group Launches First In The Range Of Currency FRB Indices
September 21, 2009--FTSE Group (“FTSE”), the award winning global index provider, and Record Currency Management (“Record”), the specialist currency investment manager, have today launched the first set of indices within the new and innovative FTSE Currency Forward Rate Bias (FRB) Index Series, allowing investors to access this alternative beta within FTSE’s range of alternative indices.
The new FRB5 indices utilise the five most widely-traded currencies (US Dollar, Euro, Japanese Yen, Pound Sterling and Swiss Franc) in a forward rate bias (also referred to as ‘carry’) strategy. Forward rate bias is the observed tendency of higher interest rate currencies to outperform lower interest rate currencies. This outperformance is captured through a series of rolling one-month forward contracts, equally-weighted across all ten currency pairs.
The indices come at a time when investors are increasingly looking at opportunities for diversification. Research from Record shows that FRB provides a fundamental and sustainable return stream that rewards the risks associated with holding higher interest rate currencies. With a low long-term correlation to other asset classes such as equities and bonds, the indices uniquely allow investors access to a pure source of alternative beta in currency markets. Based on market spot and forward prices going back to 1978, the index series is one of very few to demonstrate a long-term return over 30 years that is comparable to that of global equities and superior to that of global bonds, with volatility comparable to bonds and lower than equities. The annualised return of the FTSE Currency FRB5 total return index in USD is 9.7% p.a. since 1978.
Neil Record, Chairman and CEO of Record, said: “The FTSE Currency FRB Index Series will enable investors to develop new diversification strategies as the series returns show low correlations with established asset classes such as equities and bonds. Taken together with the scalability inherent in the currency markets and the universe of investable managers, this should help the investment community recognise the currency forward rate bias as an alternative beta.”
Imogen Dillon Hatcher, Executive Director of Global Sales at FTSE said: “The Foreign Exchange market is the largest market in the investment world, with USD 3 trillion traded daily, allowing for both retail and wholesale investment. FTSE is committed to offering investors a complete suite of index products to measure and analyse all facets of the investment landscape. The FTSE Currency FRB Index Series will allow clients to access the currency market and has been created in response to market demand.”
The new indices will be calculated on a fully-investable basis and published daily by FTSE (both excess return and total return) and are the first in a range of currency indices that FTSE and Record will work together on. These indices can be used for portfolio construction, index-tracking management, including within financial products such as ETFs and benchmarking active currency strategies.
ISDA Announces Further CDS Market Practice Changes
September 21, 2009-The International Swaps and Derivatives Association, Inc. (ISDA) today announced market practice changes to the trading convention for credit default swaps (CDS) in Emerging Markets as an additional step towards achieving increased standardization, transparency and liquidity. These changes, which will take effect on Monday, September 21, include the adoption of standardized trading coupons and a move from monthly to quarterly payment dates in emerging market CDS transactions.
“ISDA and the industry continue to work on standardizing the way in which credit default swaps are traded and settled,” said Robert Pickel, Executive Director and Chief Executive Officer, ISDA. "These changes have increased market transparency, robustness and confidence in the privately negotiated derivatives business.”
Changes will include the following:
· With regard to trades for Emerging Markets in Central and Eastern Europe, the Middle East, Africa and Latin America:
Firms will adopt standardized coupons of 100bp and 500bp. Additional coupons for trading or back-loading could be introduced at a later time if and when the need arises;
Firms will switch from semi-annual to quarterly payments and full first coupons. The move to quarterly payments applies to both the existing EM Transaction Types as well as the new Standard EM Transaction Types and has no impact on trades prior to September 21, which will maintain their semi-annual payments even upon novation or assignment.
With regard to trades for emerging markets in Australia and New Zealand, firms will adopt standardized trading coupons of 100bp and 500bp. Additional coupons for trading or back-loading could be introduced at a later time if and when the need arises.
