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France backs down on short-selling loophole
August 18, 2011--French regulators have failed in an attempt to extend the short-selling ban to major European stock market indices in a climbdown that will allow investors to continue to bet on further falls in financial stocks.
There was confusion among traders on Thursday over whether they could roll over existing short positions on key European indices. Investors were particularly unclear over the status of equity index derivatives, which consist of baskets of stocks from around the continent including shares in banks, and are operated from countries not covered by the short-selling ban.
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Source: FT.com
Europe's financial transactions tax
August 17, 2011-- European policymakers have long toyed with the idea a tax on financial transactions to raise revenue and counter speculation but critics say such a measure could only be effective at a global level.
French President Nicolas Sarkozy and German Chancellor Angela Merkel announced Tuesday at a eurozone crisis summit that they would make proposals next month for an EU-wide financial transaction tax.
The idea of a financial transactions tax traces its roots to Nobel prize-winning US economist James Tobin, who proposed in the 1970s a very small tax on currency transactions to dampen speculation on foreign exchange markets.
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Source: EUbusiness
Banks blast "Tobin tax" proposal
August 17, 2011--Banks blasted Franco-German plans to push again for a Europe-wide tax on financial transactions, saying the tax would be destabilising, ineffective and costly to industry.
Financial markets players have said that even if France and Germany could persuade all 27 European Union member states to adopt the tax - overcoming long-standing UK opposition - it would simply drive many transactions offshore to less-regulated financial centres.
The Association for Financial Markets in Europe, which represents top banks, also worried the tax would hurt companies and crimp economic growth.
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Source: Cityam
EMCF, Chi-X Join Push for Interoperability in European Clearing
August 17, 201-- Suddenly,
"interoperability" is starting to look like a word (and practice) every European clearinghouse will be using.
matters to the effective operation of capital markets.
The European Multilateral Clearing Facility (EMCF), Europe's largest central counterparty for stocks, said it has “decided to engage in interoperability with competitors” servicing electronic venues and exchanges. The clearer also said it was introducing cutting fees as much as 50 percent for large customers, as part of the move.
"The time is now to take the next step in opening up the European clearing landscape. Interoperability will make European markets more efficient and it is a tool to open up the clearing and settlement silos in Europe,’’ EMCF chief executive Jan Booij said.
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Source: Securitites Technoology Monitor
Swiss central bank adds liquidity to weaken franc
August 17, 2011--The Swiss National Bank intensified its measures Wednesday to weaken the strong franc by injecting more of the currency into the money markets.
The SNB said Wednesday it would immediately further expand the deposits of banks held at the central bank from 120 billion Swiss francs to 200 billion, as the currency "remains massively overvalued" despite previous efforts.
As part of its latest batch of measures, its third since August 3, the central bank said it will conduct foreign exchange swap transactions to ease the value of the franc and "will, if necessary, take further measures." The Swiss franc has been buoyed of late by its status as a safe haven for investors to park their cash in times of financial turbulence. Last week, it almost struck parity against the euro for the first time since the single currency was introduced in 1999.
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Source: Todays Zaman
Exchange operators hit by euro tax idea
August 17, 2011-- Shares in the operators of major exchanges took a heavy hit Tuesday after French President Nicolas Sarkozy said he would propose a European tax on financial transactions.
NYSE Euronext, which operates share markets in New York, Paris, Brussels, Amsterdam and Lisbon -- and is awaiting approval for a merger with powerful rival Deutsche Boerse -- sank 8.4 percent on the news.
The IntercontinentalExchange, which operates major global commodities and financial futures markets, dropped 4.5 percent, while The NASDAQ OMX Group that controls markets in northern Europe pared 2.75 percent.
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Source: EUbusiness
Flash estimate for the second quarter of 2011
Euro area and EU27 GDP up by 0.2%
+1.7% in both zones compared with the second quarter of 2010
August 16, 2011--GDP increased by 0.2% in both the euro area1 (EA17) and the EU271 during the second quarter of 2011, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the first quarter of 2011, growth rates were +0.8% in both zones.
Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 1.7% in both zones in the second quarter of 2011, after +2.5% in both zones in the previous quarter.
During the second quarter of 2011, GDP in the United States increased by 0.3% compared with the previous quarter (after +0.1% in the first quarter of 2011). In Japan GDP fell by 0.3% in the second quarter of 2011 (after -0.9%).
Compared with the same quarter of the previous year, GDP rose by 1.6% in the United States (after +2.2% in the previous quarter), and decreased by 0.9% in Japan (after -0.7%).
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Source: Eurostat
UBS MTF Announce Plans To Offer Four-Way Interoperability Of Central Counterparties (CCPs)
August 16, 2011--UBS MTF, the multilateral trading facility operated by UBS Limited, today announced plans to offer four-way interoperability of central counterparties (CCPs) for cash equity trades executed on UBS MTF, subject to regulatory approval.
UBS MTF, which is live with two interoperating CCPs, EuroCCP and SIX x-clear Ltd, is the first MTF to offer full interoperability for cash equities. UBS MTF plans to expand its selection by adding EMCF and LCH Clearnet. This will allow members of UBS MTF to choose between the four interoperating CCPs when clearing and settling their trades in European cash equities.
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Source: Mondovisione
Germany and France in favour of European economic governance
August 16, 2011--Berlin and Paris are calling for joint economic-policy management within the euro currency zone. Chancellor Angela Merkel and President Nicolas Sarkozy have submitted proposals as to the concrete form this could take to the President of the European Council Herman van Rompuy in a joint letter.
As announced the at EU Council meeting four weeks ago, Germany and France thus intend to lay out how the economic policy of the euro-zone states can be better coordinated, thus enhancing the competitiveness of the euro zone as a whole. Angela Merkel and Nicolas Sarkozy intend to dovetail the euro-zone states’ financial and economic policy more closely, making the euro zone more competitive and strengthening the common currency.
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Source: The Press and Information Office of the Federal Government
Eurex statement on current market activity
August 15, 2011--The current extremely volatile market environment has led to enormous increases in contract and quote volume on Eurex Exchange in the last two weeks. New records were set in some benchmark products, such as futures and options on the EURO STOXX 50 and DAX.
The total average daily trading volume (ADV) in August is at an annual high of almost 12 million contracts, compared to the yearly ADV of 8.4 million contracts. The growth in the trading and clearing volume was accompanied by an even greater rise in system transactions and quotes handled by the system. At the beginning of last week, the number of quotes even reached a new peak of 1.2 billion on a single day.
Despite the massive rise in volumes, Eurex Group’s IT systems constantly fulfilled its role as designed and provided well-functioning markets thus ensuring market integrity. The on-going and constant enhancement of and investment into Eurex Group’s IT infrastructure were the reasons that the system availability and data throughput at Eurex Exchange and Eurex Clearing remained stable – trading and clearing worked without any frictions or interruptions. The additional transaction load had no effect on the latency or response times of the Eurex systems.
Eurex not only offers high performance and stable trading opportunities for its participants; its numerous risk management services also ensure that participants can optimally manage their individual risks – even in very volatile market situations. Risk management in real time using the Enhanced Risk Solution interface and the numerous pre- and post-trade functionalities ensure that participants can identify risks at an early stage and quickly avoid excessive exposure.
The safety mechanisms that have been implemented also guarantee market integrity and orderly trading. These include volatility interruption, which allows a short-term interruption of trading in affected products in the event of high volatility, thus enabling market participants to react appropriately to excessive price volatility.
Source: Eurex
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