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IMF Country Report-Canada
February 15, 2013--KEY ISSUES
Context.
Growth slowed in 2012, as fiscal consolidation and high levels of debt weighed on households consumption, while external headwinds depressed exports and business spending. Growth is expected to accelerate again from mid 2013 as the global economy
improves, but the balance of risks remains tilted to the downside as concerns linger over the external environment and the unwinding of domestic imbalances.
Policy mix. The return to more neutral interest rates should be delayed until there are signs of a sustainable acceleration in growth. There is some space to cut rates if activity
were to weaken significantly. The pace of fiscal consolidation is appropriate under the
baseline scenario. Automatic stabilizers should be allowed to operate if growth disappoints, while temporary fiscal stimulus could be considered in the event of a large
adverse shock, especially at the federal level. It will be important to continue to address long-term spending pressures from population ageing and increasing health-care costs.
view IMF Country Report-Canada-Canada: 2012 Article IV Consultation
Source: IMF
IMF-Canada: Selected Issues
February 15, 2013--I. ASSESSING THE IMPACT OF HIGH HOUSEHOLD DEBT ON ECONOMIC VOLATILITY IN
CANADA1
A. Introduction
1. To what extent is the increase in Canada's household leverage a matter of
concern? Other advanced economies (for example, Australia, Norway, Sweden, and the United Kingdom), experienced similar or even larger increases in household debt-to-income ratios during the last decade and faced very different outcomes during the Great Recession.
In principle, it is not immediately
obvious why higher gross household debt should be a problem, especially if the increase in leverage is matched by higher gross asset positions and an
increase in net wealth (IMF, 2012,
and Dynan, 2012). And there is no
clear threshold above which
household leverage can be defined
"excessive". Moreover, as
discussed in the staff report, while
house prices seem somewhat
overvalued at the national level in
Canada (Box 1), the risk of a severe housing bust is reduced by the strong balance sheet and conservative lending practices of Canadian banks, the recourse nature of mortgage loans, and
the broad scope of government-backed mortgage insurance.
view IMF paper-Canada: Selected Issues
Source: IMF
FINRA Issues New Investor Alert: Duration-What an Interest Rate Hike Could Do to Your Bond Portfolio
February 14, 2013--WASHINGTON—The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Duration-What an Interest Rate Hike Could Do to Your Bond Portfolio. FINRA is issuing this Alert to help investors understand the importance of duration risk.
Although stated in years, duration is not simply a measure of time. The duration of a bond or a bond fund also signals how much the price of a bond investment is likely to fluctuate when interest rates move up or down.
"With interest rates hovering near all-time lows, investors should make sure they know their duration numbers. Whether investors own individual bonds or bond funds, they need to understand that outstanding bonds with a low interest rate and high duration may experience significant price drops if interest rates rise," said Gerri Walsh, FINRA Vice President of Investor Education.
view the alert-Duration—What an Interest Rate Hike Could Do to Your Bond Portfolio
Source: FINRA
BlackRock to offer ETFs with maturity dates, like bonds
February 13, 2013--BlackRock, the world's largest manager of exchange-traded funds, will soon release a new series of fixed-income funds that mature after a set number of years, like ordinary bonds.
The new ETFs are designed to simplify the task of institutional money managers like bank treasurers, who currently must juggle hundreds or even thousands of distinct bond issues in their portfolios, BlackRock President Robert Kapito said on Wednesday.
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Source: Reuters
Deutsche Bank-Synthetic Equity & Index Strategy-North America-US ETF Market Weekly Review - Markets and $1.9bn Outflows removed $4.3bn from ETP AUM
February 13, 2013--Market and Net Cash Flows Review
Markets were mixed during last week. The US (S&P 500) edged higher by 0.31%; while, outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 1.44% and 1.10%, respectively.
Moving on to other asset classes, the 10Y US Treasury Yield fell by 5 bps last week; while the DB Liquid Commodity Index was down by 0.27%. Similarly, the Agriculture sector (DB Diversified Agriculture Index), WTI Crude Oil and Silver prices retreated by 2.86%, 2.10%, and 1.30%, respectively. Last but not least, Volatility (VIX) rose by 0.93% during the same period.
The total US ETP flows from all products registered $1.9bn (-0.1% of AUM) of outflows during last week vs. $6.82bn (+0.5%) of inflows the previous week, setting the YTD weekly flows average at +$5.0bn (+$29.94bn YTD in total cash flows).
Equity, Fixed Income, and Commodity ETPs experienced flows of -$2.16bn (-0.21%), +$0.09bn (0.03%), +$0.13bn (0.11%) last week vs. +$6.9bn (0.68%), -$0.26bn (-0.10%), +$0.07bn (0.06%) in the previous week, respectively.
Among US sectors, Consumer Staples (+$0.16bn, +1.92%) and Industrials (+$0.13bn, + 2%) received the top inflows, while Materials (-$0.04bn, -0.4%) and Healthcare (-$0.04bn, -0.25%) experienced the largest outflows.
Within Equity ETPs, Developed non-US country products had the largest inflows (+$0.7bn, +2.5%), while Large Cap products had the largest outflows of $6.7bn (-2.8%). Within Fixed Income ETPs, Corporate products had the largest inflows (+$0.2bn, +0.2%), while Sovereign (-$0.3bn, -0.5%) products experienced the largest outflow. Top 3 ETPs & ETNs by inflows: DXJ (+$0.7bn), IWM (+$0.4bn), VIG (+$0.4bn)Top 3 ETPs & ETNs by outflows: SPY (-$4.7bn), QQQ (-$1.8bn), TIP (-$0.7bn)
New Launch Calendar: No new listings
No new listings during last week.
Turnover Review: Floor activity increased by 2%
Total weekly turnover increased by 1.6% to $278.45bn vs. $274.20bn from the previous week. Last week's turnover level was 3.3% higher than last year's weekly average. Equity ETPs turnover increased by $10.7bn (+4.6%); meanwhile, Fixed Income and Commodity ETPs turnover decreased by $3.5bn (-14.5%) and $3.1bn (-21.8%), respectively.
Assets under Management (AUM) Review: US ETPs AUM dropped by $4.3bn
US ETP assets dropped by $4.3bn (-0.3%) totaling $1.412 trillion at the end of the week. As of last Friday, US ETPs have accumulated an asset growth of 5.9% YTD. Assets for Equity, Fixed Income and Commodity ETPs moved -$4.4bn, +$0.1bn, -$7m during last week, respectively.
request report
Source: Deutsche Bank - Synthetic Equity & Index Strategy - North America
Mexican Exchange to HFT: Bring Us Your Business.
February 13, 2013--Mexico's main stock exchange wants more high-frequency trading on its market, seeing the activity as a way to drive growth and more listings, chairman of the Bolsa Mexicana de Valores said Wednesday.
The exchange spent about $20 million in the past two years to upgrade its technology in the hopes of bringing in more of these types of traders. The exchange can handle about 3.9 million trades a day, up from 75,000 a day in 2005.
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Source: Wall Street Journal
NYSE Arca Equities Traders and Constituents-2 ETF
February 13, 2013--Summary: NYSE Euronext (NYSE:NYX) is pleased to announce that on
Friday, February 15, 2013
, the following ETFs
will be listed on NYSE Arca and
will begin trading as new issues:
PowerShares S&P Small Cap Low
Volatility Portfolio (XSLV)
PowerShares S&P MidCap Low Volatility Portfolio (XMLV)
The Consolidated Tape Association (CTA) will disseminate real time trade and quote information for the
ETFs
to Tape B. All ETP Related Indexes will be disseminated via the NYSE Euronext Global Index Feed.
Source: NYSE Euronext
Invesco PowerShares to Expand Low Volatility Suite With US Mid-Cap & Small-Cap Listings
PowerShares International Low Volatility ETFs Cross One-Year Mark Achieving Better Risk-Adjusted Returns Than MSCI Benchmark Indexes
February 13, 2013--Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), announced today plans to expand its low volatility suite of ETFs with strategies covering the US mid-cap and small-cap segments.
The new ETFs are expected to begin trading on Feb. 15, 2013 on the NYSE Arca and will expand the PowerShares Low Volatility suite to five portfolios.
Low Volatility Strategies (anticipated listing on Feb. 15, 2013):
PowerShares S&P MidCap Low Volatility Portfolio (XMLV)
PowerShares S&P SmallCap Low Volatility Portfolio (XSLV)
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Source: Invesco PowerShares Capital Management LLC
Knight Capital Group and GETCO Announce Filing of S-4 Registration Statement With the Securities and Exchange Commission
February 13, 2013--Knight Capital Group, Inc. (NYSE: KCG, "Knight") and GETCO Holding Company, LLC ("GETCO") announced today that Knight Holdco, Inc. ("KCG"), the new public holding company that will be the ultimate parent company of Knight and GETCO upon completion of their pending transaction, filed a Registration Statement on Form S-4 with the Securities and Exchange Commission ("SEC").
The Registration Statement includes a preliminary Joint Proxy Statement of Knight and GETCO and a preliminary Prospectus of KCG (together with the Joint Proxy Statement, as amended, the "Joint Proxy Statement / Prospectus"), as well as other relevant documents concerning the proposed transaction. The Registration Statement has not yet become effective, and the information in it is subject to change.
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Source: Knight Capital Group
BlackRock's Kapito Says Firm Must Penetrate U.S. Retail Market
February 13, 2013--BlackRock Inc.'s Robert Kapito, president of the world’s largest asset manager, said the firm sees an opportunity to grow by selling more funds to individuals.
"Retail is an enormous growth opportunity,” Kapito said today at the Credit Suisse Financial Services Forum. New York- based BlackRock is still “underpenetrated” in the U.S. retail market, excluding exchange-traded funds, with less than a 2 percent market share for assets under management in open-end mutual funds, he said.
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Source: Bloomberg
