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World Gold Council-Gold Demand Trends Q1 2020 report-Q1 gold demand marginally firmer at 1,083.8t
April 30, 2020--The global COVID-19 pandemic fuelled safe-haven investment demand for gold, offsetting marked weakness in consumer-focused sectors of the market.
Key highlights
Gold ETFs saw the highest quarterly inflows for four years amid global uncertainty and financial market volatility.
Holdings of these products reached a record high of 3,185t by the end of Q1.
The pandemic slashed jewellery demand as governments across the globe imposed lockdown measures.
Demand fell to its lowest on record, led by a 65% decline in China-the largest jewellery consumer and the first market to succumb to the outbreak.
Bassanese Bites: Oil slick
April 27, 2020--Global Markets
Not much has been able to roil the US stockmarket of late, but last week's negative print on the front month WTI oil futures contract finally did the trick. The S&P 500 dropped almost 5% over two days but then staged a feisty comeback to end the week down only 1.3% - helped by an equally admirable fight back in oil prices.
US bonds and gold benefited from the risk-off shift.
Why did oil prices go negative? Because the U.S., in particular, is awash in oil, and those left holding the nearest-term futures contract at expiration-and therefore required to take delivery of physical oil-would face very expensive US storage costs. Until the supply glut is removed, that means there's a risk the current nearest-term June contract price could also go negative as it approaches expiry. [By the way, to reduce this risk, the BetaShares OOO ETF-which ordinarily would have exposure to the nearest-term WTI futures contract, has shifted its exposure to the longer-dated September contract for the time being.]
Managing COVID-19: How the pandemic disrupts global value chains
April 27, 2020--COVID-19 has struck at the core of global value chain hub regions, including China, Europe and the US.
Industrial production in China has fallen by 13.5% in January and February combined, compared with the previous year.
The pandemic has severe implications for international production networks and may leave its legacy for years to come.
Over the past four decades, much of manufacturing production world-wide has been organized in what has become known as global value chains (GVCs). Raw materials and intermediate goods are shipped around the globe multiple times and then assembled in yet another location. The final output is re-exported to final consumers located in both developed and developing markets. For many goods, China is at the heart of such GVCs-for example, as a primary producer of high-value products and components, as a large customer of global commodities and industrial products, and as a major consumer marketplace.
World Bank-A Shock Like No Other: Coronavirus Rattles Commodity Markets
April 23, 2020--STORY HIGHLIGHTS
The coronavirus (COVID-19) pandemic has impacted both demand for and supply of commodities: direct effects from shutdowns and disruptions to supply chains, indirect effects as economic growth stalls. Effects have already been dramatic, particularly for commodities related to transportation.
Oil prices have plunged and demand is expected to fall by an unprecedented amount in 2020.
While most food markets are well supplied, concerns about food security have risen as countries announce trade restrictions and engage in excess buying.
view the World Bank Commodity Markets Outlook April 2020 Implications of COVID-19 for Commodities
Investors with US$5 trillion call on governments to institute mandatory human rights due diligence measures for companies
April 21, 2020--Legal & General Investment Management, Federated Hermes International, Aberdeen Standard Investments, Aviva Investors, BMO Global Asset Management, Robeco, and Achmea Investment Management among list of signatories
A group of 105 international investors representing US$5 trillion in assets under management have joined forces to call on governments to put in place regulatory measures requiring companies to conduct ongoing risk management regarding risks to people associated with their business activities.
Known as "human rights due diligence," this process involves a company assessing and addressing harms to people in connection with its business, and publicly disclosing these efforts.
All that drama about fixed-income ETFs was overplayed
April 21, 2020--Exchange traded funds holding bonds played a key role in easing March turmoil
Everyone loves a crisis that confirms biases. And in the case of exchange traded funds, this has been a good period for their legions of detractors.
But what if ETFs actually eased, rather than exacerbated, the market mayhem that broke out last month?
Many investors have for years argued that ETFs distort markets and fuel bubbles. Much of that consternation was overblown- bubbles existed long before the index fund was invented.
Sub-zero oil prices threaten big losses for ETF investors
April 20, 2020--Those betting on crude recovery using exchange traded funds face 'high risks'
Investors who have flooded into the oil markets to bet on a rebound in crude prices are risking big losses, say commodity specialists, as the exchange traded funds they use are swept up in the current market turmoil.
The United States Oil fund, the largest oil ETF known as USO, saw inflows of about $1.5bn last week, as US crude prices hit their lowest levels since the early 2000s on plunging demand.
Bassanese Bites: Fed faith
April 20, 2020--Global Markets
Despite continued shocking US economic data and corporate earnings results, hopes with regard to US curve flattening and potential re-opening of the US economy continued to drive a positive view on risk markets last week.
Other positives were a leaked media report suggesting Gilead's remdesivir drug can reduce the risk of death from CV-19, as well as a lingering view that the Fed simply won't let Wall Street drop again in a big way-and could even buy equities if need be.
Also helping the US market in particular is the fact that the leading tech-style stocks-such as Amazon-have been least negatively affected by the shutdowns so far, and there’s now a major crowding into these perceived safer stocks taking place.
FESE European Capital Markets Fact SheetQ1 2020
April 20, 2020--The European Capital Markets Fact Sheet provides a quarterly overview of European securities trading in a visual fashion. The report includes figures aggregating FESE members' statistics from each asset class.
view the European Capital Markets Fact SheetQ1 2020
Unreal: Oil prices go negative for the first time in history
April 20, 2020--Crude oil prices dropped into negative territory for the first time in history Monday, as financial fireworks collided with evaporating demand and scarce storage. The decline below zero means that sellers are effectively paying buyers to take the oil off their hands.
By late Monday afternoon New York time, the front month WTI contract was sitting at minus $38.45/barrel, down an eye-watering 310.45% on the day.