Global ETF News Older than One Year
Bassanese Bites: Range trade
July 6, 2020-Equities remain range bound as the virus spoils the re-opening party.
Global markets
Global equities managed to shrug off mounting U.S. virus concerns last week and instead focus on better than expected 're-opening' economic data. Of course, the Fed chipped in with further "whatever it takes" supportive comments, and another drug company announced early promising vaccine results.
Equities bounced and the $US weakened, though bond yields held remarkably steady and gold also held up well. In terms of data, June readings on U.S. manufacturing, consumer confidence and employment were all better than expected, and May existing home sales also surged back after sharp falls in March and April.
Source: betashares.com.au
Credible emerging market central banks could embrace quantitative easing to fight COVID-19
July 6, 2020--Credible emerging market central banks could embrace quantitative easing to fight COVID-19
Emerging economies are fighting COVID-19 and the economic sudden stop imposed by the containment and lockdown policies, in the same way as advanced economies. However, emerging markets also face large and rapid capital outflows as a result of the pandemic.
This column argues that credible emerging market central banks could rely on purchases of local currency government bonds to support the needed health and welfare expenditures and fiscal stimulus. In countries with flexible exchange rate regimes and well-anchored inflation expectations, such quantitative easing would help ease financial conditions, while minimising the risks of large depreciations and spiralling inflation.
Source: bruegel.org
Basel Committee reports on Basel III implementation progress
July 6, 2020--Report sets out the adoption status of Basel III standards in member jurisdictions as of end-May 2020
Report shows further progress in implementing these standards since previous report in October 2019
Committee will continue to closely monitor the implementation of Basel III reforms.
The Basel Committee on Banking Supervision has today issued the Eighteenth progress report on adoption of the Basel regulatory framework.
The progress report sets out the adoption status of Basel III standards for each Committee member jurisdiction as of end-May 2020. It includes the Basel III post-crisis reforms published by the Committee in December 2017 and the finalised minimum capital requirements for market risk in January 2019. According to the announcement made by Governors and Heads of Supervision in March 2020, these reforms will take effect from 1 January 2023.
Source: BIS
OECD annual inflation slowed to 0.7% in May 2020, driven by energy prices; food prices inflation continued to rise
July 2, 2020--May 2020 OECD annual inflation slowed to 0.7% in May 2020, driven by energy prices; food prices inflation continued to rise
Annual inflation in the OECD area slowed to 0.7% in May 2020, compared with 0.9% in April and 1.7% in March, on the back of the largest fall in energy prices since September 2009.
Energy prices declined by a further (minus) 13.4% in May, following the contraction of (minus) 12.2% in April. By contrast, food price inflation picked up to 4.5%, compared with 4.2% in April, the largest annual increase since December 2011. Excluding food and energy, OECD inflation was stable at 1.6% in May 2020.
Source: OECD
Digital Financial Inclusion in the Times of COVID-19
July 1, 2020--The COVID-19 pandemic could be a game changer for digital financial services. Low-income households and small firms can benefit greatly from advances in mobile money, fintech services, and online banking.
Financial inclusion as a result of digital financial services can also boost economic growth. While the pandemic is set to increase use of these services, it has also posed challenges for the growth of the industry's smaller players and highlighted unequal access to digital infrastructure. Several actions will need to be taken to ensure maximum inclusion going forward.
Source: IMF
IMF-The Promise of Fintech:Financial Inclusion in the Post COVID-19 Era
July 1, 2020--Summary:
Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world.
During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.
view the IMF Departmental Papers-The Promise of Fintech:Financial Inclusion in the Post COVID-19 Era
Source: IMF
IEA-Sustainable Recovery
World Energy Outlook Special Report
July 1, 2020--Since the scale of the economic crisis began to emerge, the IEA has been leading the calls for governments to make the recovery as sustainable and resilient as possible. This means immediately addressing the core issues of global recession and soaring unemployment -and doing so in a way that also takes into account the key challenge of building cleaner and more secure energy systems.
As they design economic recovery plans, policy makers are having to make enormously consequential decisions in a very short space of time. These decisions will shape economic and energy infrastructure for decades to come and will almost certainly determine whether the world has a chance of meeting its long-term energy and climate goals.
Source: IEA (International Energy Agency)
FTSE Russell-Impact of COVID-19 on USD Corporate Bond Liquidity
July 1, 2020-- The COVID-19 crisis has impacted asset valuations, increased volatility and led to reduced liquidity in many cases. Most asset classes have been affected, and governments have stepped in to support financial operations. In this paper, we examine the effects of the crisis on the year-to-date liquidity of USD corporate bonds, as measured by the price liquidity ratio.
The price liquidity ratio calculated by Yield Book looks at market impact and measures the movement in price of a security for an executed trade of a given size. The price movement is calculated on an excess of curve basis, and then aggregated across the given index or sector. A higher ratio represents a larger movement in price for a given trade size and therefore shows lower liquidity.
Source: FTSE Russell
U.N. warns COVID-19 could wipe out gains in equality for women at work
June 30, 2020--The coronavirus pandemic could wipe out "the modest progress" made on gender equality at work in recent decades with women globally at greater risk of losing their jobs, the International Labour Organization (ILO) warned on Tuesday.
The U.N. agency said the fall in global working hours was "significantly worse than previously estimated" in the first half of the year. The Americas was the hardest-hit region.
Source: reuters.com
Central banks a stabilising force in response to unprecedented crisis
June 30, 2020--Central banks played a crucial role together with fiscal and prudential authorities in a concerted response to the Covid-19 crisis.
The lender of last resort role of central banks has evolved as they sought to mitigate the blow to the economy.
As the crisis transitions from a liquidity phase to a solvency one, governments must take the lead to promote a strong and sustainable recovery.
Central banks played a key role in the unprecedented response to the Covid-19 crisis during the acute phase of the pandemic, working with fiscal authorities to cushion the economic and financial blow and support companies and workers, the Bank for International Settlements (BIS) said in its Annual Economic Report 2020.
Source: BIS
